India-China Trade Surges 29% to $91.76B, Overtaking US
India's bilateral trade with China reached $91.76 billion in H1 FY27, marking a 29% increase and surpassing the US as its largest trading partner for...
The Cliff News | 16 October 2026
India's trade engagement with China experienced a significant surge in the first half of the fiscal year 2026-27, reaching $91.76 billion. This represents a substantial 29% increase year-on-year, positioning Beijing as India's foremost trading partner for the April-September period.
This robust growth in bilateral trade has enabled China to overtake the United States as India's largest trading partner in the initial six months of the current fiscal year. In the corresponding period of the previous fiscal year, 2025-26, the two-way trade between India and China stood at $71.24 billion.
Shifting Trade Dynamics
The United States, previously India's largest trading partner, saw its bilateral trade volume grow to $83.14 billion in the first half of FY27. This marks a 16.5% increase from the $71.39 billion recorded in the same period of FY26.
While trade with the US also showed positive growth, the faster expansion of trade with China has resulted in a shift in rankings. The data, released by the commerce ministry, underscores the dynamic nature of India's international trade relationships.
Trade Composition and Deficit
India's exports to China demonstrated a strong performance, climbing 36% to $11.41 billion during April-September 2026-27, up from $8.38 billion in the prior year. Conversely, imports from China saw a considerable rise of 27.82%, reaching $80.34 billion compared to $62.86 billion.
This disparity in growth rates between exports and imports has led to a widening of India's trade deficit with China. The deficit expanded to $68.93 billion in the first half of FY27, a notable increase from $54.06 billion in the corresponding period of the previous fiscal year.
India-US Trade Performance
In parallel, India's trade with the United States saw an increase to $83.14 billion for April-September 2026-27, up from $71.39 billion in the year-ago period. Exports to the US rose by 11.11% to $50.81 billion, while imports from the US increased by 25.98% to $32.32 billion.
The faster growth in imports compared to exports has resulted in a narrower trade surplus for India with the US. The surplus reduced to $18.49 billion from $20.07 billion in the first half of FY26. Despite these shifts, the US continues to be India's largest destination for merchandise exports.
India-US Trade Agreement Negotiations
Commerce Secretary Rajesh Agrawal expressed optimism regarding the ongoing negotiations for a proposed India-US trade agreement. He stated that discussions are progressing positively, and both nations are actively working towards its earliest conclusion.
“The negotiations are in the right direction. Probably, we are in a very good zone. We anticipate closing the deal and signing it at the earliest possible time,” Agrawal said.
The finalisation of this agreement is contingent upon the broader US tariff framework and a parallel process underway under Section 301. India is actively seeking preferential market access within the US to enhance the competitiveness of its exporters.