India-China: Bilateral Trade Crosses 125 billion USD in 2021

In 2021, the bilateral trade between India and China stood at 125.66 billion USD, up 43.3% from 2020.
China’s exports to India were 97.52 billion USD while China’s imports from India were 28.14 billion USD in 2021.
India was China’s 15th largest trade partner in 2021.
- Exports: India’s biggest exports to China were iron ore, cotton and other raw material-based commodities.
- Imports: India’s imports from China included electrical and mechanical machinery, active pharmaceutical ingredients (APIs), auto components and medical supplies.
- Trade Deficit: Trade deficit between the two countries remained in favour of China – at $69 billion.

Reasons behind Widening of Trade Deficit

The widening of India’s trade deficit with China can be attributed to two factors:
Narrow basket of commodities, mostly primary, for export to China; and
Lack of market access for most of India’s agricultural products and the sectors where India is competitive such as pharmaceuticals and IT.