NEW DELHI: India’s trade deficit with China is expected to reach $106 billion in 2025 as imports are rising faster than the country’s exports to the neighbouring country, think tank GTRI said on Friday.

It said the country’s exports to China fell from $23 billion in 2021 to $15.2 billion in 2022, stayed low at $14.5 billion in 2023, and then edged up to $15.1 billion in 2024.

In 2025, exports are estimated to improve to $17.5 billion, still well below earlier levels, the Global Trade Research Initiative (GTRI) said in its report.

On the other hand, imports from the neighbouring country have climbed much faster - from $87.7 billion in 2021 to $102.6 billion in 2022, $91.8 billion in 2023 and $109.6 billion in 2024.

This calendar year, the country’s inbound shipments are estimated at $123.5 billion.

“This has pushed India’s trade deficit (difference between imports and exports) with China from $64.7 billion in 2021 to $94.5 billion in 2024, and an expected $106 billion in 2025,” GTRI founder Ajay Srivastava said.

On December 16, in a written reply to the Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada has said 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, which are used for making finished products which are also exported out of India.

“An Inter-Ministerial Committee (IMC) has been constituted to consider the trends with respect to imports and exports and recommend corrective action wherever required,” he has said.

According to the GTRI, nearly 80 per cent of India’s imports from China are concentrated in just four product groups - electronics, machinery, organic chemicals and plastics.

Plastics imports during the period stood at $6.3 billion, including $871 million of PVC resin, while steel and steel products amounted to $4.6 billion and medical and scientific equipment added $2.5 billion.

“Together, these figures show India’s import bill from China is anchored in electronics, machinery, chemicals and materials that are difficult to substitute quickly, explaining the persistence of a large bilateral trade deficit despite efforts to diversify supply chains,” he added.

In November, India’s exports to China rose by 90 per cent to $2.2 billion. During April-November, the exports were up 33 per cent to $12.2 billion.