India’s Exports Rise Strongly to US, China - Trade Imbalances Remain a Concern

India’s trade with the United States and China is showing strong export momentum, but the latest data underline sharply different challenges in the two relationships.

India’s exports to the US rose 12.85 per cent year-on-year to USD 9.02 billion in July, while shipments to China surged 64.57 per cent to USD 2.2 billion. During April-July 2026-27, exports to the US grew 3 per cent to USD 34.5 billion, against imports of USD 22.12 billion, leaving India with a merchandise trade surplus of about USD 12.38 billion.

China presents the opposite picture. Indian exports rose 35.97 per cent to USD 7.78 billion during the first four months, but imports climbed 29.68 per cent to USD 52.71 billion. This translated into a trade deficit of roughly USD 44.93 billion, highlighting India’s continued dependence on Chinese goods, components and technology-related imports.

The US relationship faces an important policy test. Washington imposed an additional 10 per cent tariff on Indian goods from July 24, raising concerns over exporters’ price competitiveness. At the same time, India- US trade pact negotiations remain active, with both sides seeking to resolve outstanding trade issues and establish more predictable market access. India is maintaining regular contact with Washington and pursuing an early agreement.

The strong rise in shipments to China offers a positive counterpoint. It indicates expanding demand for Indian products and suggests exporters are gaining traction in the Chinese market. Yet the scale of imports means stronger exports alone have not significantly reduced the bilateral deficit.

India’s broader trade performance is also being shaped by higher freight costs, shipping disruptions and rising electronics imports. July merchandise exports reached a record USD 44.24 billion, supported by petroleum products, electronics and engineering goods, but the overall trade deficit widened to USD 31.98 billion.