India’s goods exports to China have grown consecutively for seven months in the current fiscal year (FY26), a development that offers New Delhi welcome relief amid rising trade pressure from the United States. According to recent data, exports to China reached approximately US$10.03 billion between April and October — up 24.7 % year-on-year — and in October alone jumped by 42 %.
This sustained surge comes at a time when Indian exporters face steep US tariffs on sectors such as textiles, seafood and engineering goods. By shifting more shipments toward China, India appears to be diversifying its export destinations and mitigating some of the external risk associated with trade conflicts.
What Is Driving the Export Uptick?
Several key product groups have emerged as drivers of the export growth:
- Petroleum products: Exports of refined and processed oil-based goods to China have seen strong demand.
- Telecom instruments and components: These shipments have also shown marked increases.
- Marine goods: Seafood and related marine exports are contributing to the rising volumes.
One trade industry official described the trend as “one of the most resilient phases in bilateral trade in recent years”, especially given weak global demand and uncertainty in other export markets.
Why the Timing Matters
The rise in exports to China is significant for several reasons:
- US tariff headwinds: India is navigating higher tariff barriers imposed by the US on Indian exports, so any alternate export channel helps reduce exposure.
- Export diversification: Moving shipments to non-traditional or less-tariffed destinations helps build resilience in export strategy.
- Domestic push for manufacturing & value addition: The pattern reflects shifts toward higher-value segments and longer-term supply-chain positioning.
Analysts note that while China remains India’s largest import partner (with an import value during April-October reaching about US$74 billion) the rising export values to China signal reversal of decades-long trade imbalances, albeit partly.
The Challenges and Caveats
Despite the positive numbers, several caution flags remain:
- The export rise to China, though strong, still represents a relatively small portion of India’s overall merchandise exports.
- India’s trade deficit with China remains large; increased exports do not necessarily erase underlying imbalances.
- A dependence on a narrow set of destination-markets or commodity-exports could leave India vulnerable to demand shocks.
- Tariff diversification does not automatically mean structural competitiveness or sustained growth without ongoing reforms.
Policy Implications and Strategic Outlook
For policymakers and trade strategist the data suggests:
- Need for boosting product diversification: Sustained export growth will require broadening the export basket beyond a few key commodities.
- Strengthening bilateral trade infrastructure with China: Logistics, compliance, standards, and trade facilitation will matter.
- Leveraging the opportunity: With US tariffs rising, India has a window to expand manufacturing, pursue regional trade links, and strengthen supply-chain linkages.
- Monitoring geopolitical risk: Relations with China remain complex; trade gains must be evaluated alongside strategic risk.
What to Watch Going Forward
- Whether the upward trend in exports to China continues beyond the first seven months of FY26.
- The composition of exports: how much shifts from raw commodities to value-added goods.
- How other export markets (USA, EU, ASEAN) respond or compensate.
- Policy support for exporters: incentives, trade facilitation, dispute-resolution mechanisms.
- Trade data revisions and real-time performance vs official projections.
