China has once again become India’s largest trading partner in the financial year 2025–26, overtaking the United States after four consecutive years. According to government data, the total bilateral trade between India and China reached USD 151.1 billion during the fiscal year. At the same time, India’s trade deficit with China widened sharply to USD 112.16 billion, marking a significant increase compared to previous years.

The United States had held the position of India’s largest trading partner from 2021–22 to 2024–25. However, the latest figures show a shift in this trend. India’s exports to China saw a strong rise of 36.66 per cent, reaching USD 19.47 billion in 2025–26. Imports from China also grew by 16 per cent, amounting to USD 131.63 billion. This imbalance between imports and exports pushed the trade deficit to an all-time high of USD 112.6 billion, compared to USD 99.2 billion recorded in 2024–25.

In contrast, trade with the United States showed a more moderate growth pattern. India’s exports to the US increased slightly by 0.92 per cent to USD 87.3 billion during the last fiscal year. Imports from the US rose by 15.95 per cent, reaching USD 52.9 billion. Despite maintaining a trade surplus with the US, the gap narrowed. The surplus declined to USD 34.4 billion in 2025–26 from USD 40.89 billion in the previous fiscal year.

The data also highlights the shifting dynamics of India’s global trade relationships over the years. China had previously been India’s largest trading partner from 2013–14 to 2017–18 and again in 2020–21. Before China, the United Arab Emirates held the top position. The United States then became India’s leading trade partner starting from 2021–22, a position it has maintained until now.

The report further indicates mixed trends in India’s trade performance with other major partners. Several countries recorded a decline in India’s exports during 2025–26. These include the Netherlands, the United Kingdom, Singapore, Bangladesh, Saudi Arabia, Australia, France, South Africa, and Malaysia. This suggests a slowdown in demand or shifting trade patterns in these regions.

At the same time, India managed to increase its exports to a number of other countries. Positive growth was seen in exports to the United Arab Emirates, Germany, Hong Kong, Italy, Nepal, Brazil, Spain, Belgium, and Vietnam. This reflects a diversification in India’s export markets and growing demand in these regions.

On the import side, India experienced a decline in imports from several countries. These include Russia, Iraq, Indonesia, Australia, Qatar, and Taiwan. However, imports increased from other major partners such as the United Arab Emirates, Saudi Arabia, Hong Kong, Switzerland, Singapore, Japan, South Korea, Germany, Thailand, and Malaysia. These trends show that India’s import sources are also evolving based on demand and supply conditions.

Overall, the latest data points to a significant shift in India’s trade landscape. China’s return as the top trading partner highlights the strong trade ties between the two countries, despite the widening trade imbalance. At the same time, India continues to maintain important economic relationships with the United States and other global partners. The rising trade deficit with China remains a key concern, as it reflects India’s heavy dependence on imports from the country.