Indian exports to China have experienced a 40% increase in the five months through August, with electronics emerging as a key growth driver. According to Bloomberg News analysis of government data, electronics and engineering goods are among the biggest contributors to this surge. The figures show exports to China tripled to $3.18 billion in the fiscal year ended March, driven by products including printed circuit board assemblies, smartphones, display modules and telecom equipment. Electronics shipments have continued to rise more than 15% in the April-August period from the previous year, with engineering exports to China rising about 21% in the same period, including machinery and parts, auto components and hand tools.
The export surge is primarily attributed to demand created by the global AI and data-center build-out, as noted by Rajoo Goel, secretary general of the Electronic Industries Association of India. Pankaj Mohindroo, chairman of Indian Cellular and Electronics Association, emphasized that "the surge in exports to China is partly driven by pressure on suppliers to meet the demand for high-end equipment required for AI-related products and as data centers proliferate." This trend demonstrates how India's manufacturing capabilities are beginning to win credibility in one of the world's most competitive global value chains, with Indian manufacturing gaining credibility in global value chains according to industry executives.
According to Bloomberg News and commerce ministry data, merchandise exports rose 38.71% to $9.61 billion in the April-August period, compared with $6.93 billion in the corresponding period of the previous fiscal year. Engineering goods accounted for 20.73% of the export growth, followed by electronic goods at 15.4%, petroleum products at 13.55%, organic and inorganic chemicals at 10.53% and iron ore at 9.97%. This comprehensive growth across multiple sectors demonstrates India's expanding manufacturing capabilities and export diversification in the Chinese market.
Despite the export growth, China remains a relatively small destination for Indian goods, accounting for 4.4% of exports in the year-ended March, compared with just over 3% a year earlier. The US, India's biggest market, takes almost a fifth of Indian exports. India imported $131.6 billion of Chinese goods in the year ended March, accounting for almost 17% of its imports and vastly exceeding the value of goods it sold to China. A separate study by Koan Advisory Group and the Institute of Chinese Studies puts India's trade deficit with China at $112.1 billion in 2025-26, with electrical machinery and electronic equipment accounting for $43.1 billion, or about 38% of that gap. The study also found that China accounted for at least 80% of India's imports across 71 eight-digit tariff lines in 2025-26.
The recent gains offer support for India's years-long effort to expand manufacturing and secure a bigger role in global supply chains. Arun Kumar Garodia, managing director at Corona Steel Industry Pvt., noted that "the increase in exports, while still small, suggests Beijing may be becoming more receptive to Indian goods in the current geopolitical environment." Commerce secretary Rajesh Agrawal confirmed that the two countries are looking at the structural trade imbalance, supply-chain issues and ways to build trust in bilateral trade. Industry executives remain confident that Indian shipments to China will continue to grow, with the task being to sustain these exports and expand across components, sub-assemblies and finished products, while deepening Indian design and component capabilities according to Mohindroo.
