India’s exports to China recorded a sharp increase in recent months, rising nearly 90 percent year on year in November to reach 2.2 billion dollars. For the April to November period of the current financial year, exports to China stood at 12.2 billion dollars, reflecting a growth of 33 percent compared to the same period last year. While these figures suggest a strong rebound at first glance, trade experts have advised caution in interpreting the data.
According to a report by the Global Trade Research Initiative (GTRI), the surge in exports does not necessarily point to a sustainable turnaround in India–China trade relations. The report highlights that the growth is concentrated in a narrow range of products and is highly volatile in nature. As a result, the headline numbers may not reflect a broad-based strengthening of India’s export competitiveness in the Chinese market.
One of the key drivers of the recent export surge has been naphtha, a petrochemical feedstock used in various industrial processes. GTRI noted that exports of naphtha increased by 172 percent between April and October, with some individual months witnessing spikes of more than 500 percent. This surge was primarily due to a sharp rise in Chinese demand rather than a sustained expansion of India’s manufacturing or value-added exports.
The report also pointed out that such commodity-led export growth can be unpredictable, as it depends heavily on short-term demand cycles and price fluctuations. Any slowdown in Chinese demand or changes in global energy markets could quickly reverse these gains. This volatility makes it difficult to view the current export growth as a stable long-term trend.
At the same time, India’s imports from China continue to rise at a steady pace. China remains one of India’s largest trading partners, with imports spanning electronics, machinery, chemicals, and intermediate goods. Despite the recent export increase, the trade balance remains heavily tilted in China’s favour, with India running a significant trade deficit.
GTRI cautioned that focusing solely on headline export growth figures could mask deeper structural issues in the bilateral trade relationship. The report stressed the need for India to diversify its export basket, increase value-added manufacturing, and reduce dependence on a limited number of commodities. Strengthening domestic supply chains and improving market access for a wider range of products were also identified as key priorities.
Economists note that while short-term export surges can provide temporary relief, long-term trade stability requires consistent performance across multiple sectors. For India, reducing the trade gap with China will depend on sustained improvements in industrial competitiveness and export diversification.
In conclusion, while India’s export numbers to China have shown impressive growth in recent months, experts warn against reading too much into the data. The GTRI report underscores the importance of looking beyond short-term spikes and addressing structural challenges to achieve a more balanced and resilient trade relationship with China.
