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India’s Exports to China Rise 22% in FY25 Amid Strong Demand
India’s exports to China grew by 22% in FY25, according to government data, signaling stronger trade ties despite geopolitical tensions. The surge highlights India’s increasing competitiveness in raw materials, pharmaceuticals, and engineering goods, meeting China’s demand amid global supply chain shifts.
Top Sectors Driving Export Growth
The Commerce Ministry identified key contributors:
– Iron ore (rebound in Chinese steel demand)
– Cotton (alternative sourcing amid global shortages)
– Pharmaceuticals (generic drugs and APIs for China’s healthcare sector)
– Engineering goods (auto components, telecom equipment)
Indian organic chemicals and seafood shipments also saw significant growth, reflecting diversification beyond traditional commodities.
Trade Deficit Narrows, but Challenges Remain
While exports rose, India’s trade deficit with China persists, driven by higher imports of electronics, machinery, and chemicals. However, the 22% export boost helped marginally reduce the gap. The government is pushing for better market access in agriculture, textiles, and IT services to further balance trade.
Geopolitics vs. Trade: A Pragmatic Balance
Despite border tensions since the 2020 Galwan clash, economic ties remain resilient. Experts note:
– China relies on Indian raw materials (iron ore, cotton).
– India benefits from export revenues and manufacturing inputs.
Recent talks focused on reducing non-tariff barriers, which have historically limited Indian exporters’ access.
Government Policies Boosting Exports
Key initiatives fueling growth:
– Production Linked Incentive (PLI) Scheme (boosting manufacturing)
– RoDTEP (refunding export taxes/duties)
– Diversification into high-value exports (renewable energy tech, electronics)
Future Outlook & Key Strategies
To sustain growth, India must:
1. Diversify exports beyond commodities (e.g., electronics, chemicals).
2. Improve logistics to cut shipping costs.
3. Leverage trade deals like RCEP for better terms.
Risks include China’s slowing economy and potential commodity price volatility.
Conclusion
India’s 22% export surge to China in FY25 underscores resilient trade ties. With strategic diversification and policy support, this growth could narrow the trade deficit further. Yet, long-term success depends on overcoming logistical and geopolitical hurdles.
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