**Executive Summary**
This document is a response to Unstarred Question No. 2537 in Lok Sabha, answered on December 16, 2025, concerning the trade deficit with China. It outlines the increase in the trade deficit, explains its causes, and details the government's measures, including the formation of an Inter-Ministerial Committee (IMC), to address the issue. The response is provided by the Minister of State in the Ministry of Commerce and Industry.
**Key Points / Main Content**
* **Trade Deficit Increase:**
* India's trade deficit with China has increased from USD 58.09 billion in Apr-Oct, 2024 to USD 63.97 billion in Apr-Oct, 2025, representing a 10.1% rise.
* India's export to China increased from USD 8.04 billion in Apr-Oct, 2024 to USD 10.02 billion in Apr-Oct, 2025, a rise of 24.7%.
* **Causes of Trade Deficit:**
* The trade deficit is mainly attributed to imports of raw materials, intermediate goods, and capital goods.
* These imports include auto components, electronic parts and assemblies, mobile phone parts, machinery and its parts, and Active Pharmaceutical Ingredients used to manufacture finished products that are subsequently exported from India.
* **Government Measures:**
* An Inter-Ministerial Committee (IMC) has been established to analyze import and export trends and recommend corrective actions.
* The IMC's composition includes representatives from the Department of Commerce, Department of Revenue, Department for Promotion of Industry and Internal Trade, Directorate General of Foreign Trade, and Directorate General of Commercial Intelligence and Statistics.
* The IMC monitors exports and imports on a regular basis and implements corrective measures in consultation with stakeholders.
**Impact Analysis**
**Stakeholder: Government of India (Ministry of Commerce and Industry)**
* **Impact:** Responsible for addressing the growing trade deficit with China.
* **Action Required:** Monitor trade trends, implement corrective measures through the IMC, and consult with stakeholders.
**Stakeholder: Indian Exporters**
* **Impact:** Affected by trade policies and the overall trade environment with China.
* **Action Required:** Adapt to any policy changes, seek opportunities to increase exports, and work with the government to address trade barriers.
**Stakeholder: Indian Importers**
* **Impact:** Affected by import regulations and tariffs related to Chinese goods.
* **Action Required:** Monitor import policies, explore options for sourcing goods from other countries, and ensure compliance with import regulations.
**Stakeholder: General Public / Consumers**
* **Impact:** Indirectly affected by the cost and availability of goods due to trade policies.
* **Action Required:** None specified.
Key Entities Referenced
Trade Deficit with China: The primary subject of the parliamentary question, focusing on trade imbalances between India and China.
Ministry of Commerce & Industry: The Indian government ministry responsible for matters related to trade and industry, and the source of the response to the parliamentary question.
Inter-Ministerial Committee (IMC): The committee constituted to address import and export trends and recommend corrective actions related to trade with China.
China: The country involved in the trade deficit issue.
GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF COMMERCE
LOK SABHA
UNSTARRED QUESTION NO. 2537
ANSWERED ON 16/12/2025
TRADE DEFICIT WITH CHINA
2537: SHRI V K SREEKANDAN:
Will the Minister of COMMERCE & INDUSTRY (वाणिज्य एवं उद्योग मंत्री)
be pleased to state:
(a) whether it is a fact that trade deficit with China widens despite exports surge to
China;
(b) whether it is also a fact that exports to China grew by 25% during the April- October
2025 period;
(c) whether it is also true that India’s trade deficit with China continued to widen touching
US $64 billion in the first seven months of the current financial year;
(d) whether it is also true that to address this issue the Government has formed an Inter-
Ministerial Panel for Import Surge Monitoring; and
(e) if so, the details thereof including the composition and the action taken by the panel
in this regard so far?
ANSWER
वाणिज्य एवं उद्योग मंत्रालय में राज्यमंत्री (श्री णिणिन प्रसाद)
THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY
(SHRI JITIN PRASADA)
(a) to (c): India’s trade deficit with China has increased from USD 58.09 billion in Apr-
Oct, 2024 to USD 63.97 billion in Apr-Oct, 2025, a rise of 10.1%. However, the deficit is
mainly due to imports of raw materials, intermediate goods and capital goods, like auto
components, electronic parts and assemblies, mobile phone parts, machinery and its
parts, Active Pharmaceutical Ingredients, etc. which are used for making finished
products which are also exported out of India. India’s export to China has also increased
from USD 8.04 billion in Apr-Oct, 2024 to USD 10.02 billion in Apr-Oct, 2025, a rise of
24.7%.
(d) & (e): An Inter-Ministerial Committee (IMC) has been constituted to consider the
trends with respect to imports and exports and recommend corrective action wherever
required. The composition of the IMC includes representatives from Department of
Commerce, Department of Revenue, Department for Promotion of Industry and Internal
Trade, Directorate General of Foreign Trade and Directorate General of Commercial
Intelligence and Statistics. The IMC monitors exports and imports regularly and takes
corrective measures in consultation with various stakeholders.
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