India is pursuing a balanced trade strategy with China rather than complete decoupling. Indian exports to China surged 37 percent to USD 19.47 billion in 2025-26, while imports rose 16 percent to USD 131.63 billion, widening the trade deficit to USD 112.6 billion. The government acknowledges Chinese inputs remain critical for India's industrial growth, particularly raw materials, electronics, and pharmaceutical ingredients. To reduce import dependence, India is diversifying its supplier base by sourcing from Taiwan, South Korea, Japan, and the European Union. Key export sectors showing strong growth include printed circuit boards, electrical appliances, shrimp, and aluminium ingots. The production-linked incentive scheme aims to boost domestic manufacturing capacity and create resilient supply chains.
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