India’s exports to China surge in December while shipments to U.S. decline as Trump tariffs bite

India's exports to China soared successful December portion shipments to the U.S. declined arsenic President Donald Trump's steep tariffs punctual New Delhi to absorption connected alternate markets.

Exports to China surged 67% successful December to $2 billion, successful opposition to goods shipped to the U.S. — New Delhi's biggest export marketplace — that dropped 1.8% to $6.8 billion, according to authorities information released precocious Thursday.

The U.S. has slapped 50% tariffs connected New Delhi, among the highest connected immoderate state and adjacent much than connected China, upending some the commercialized and diplomatic relations betwixt the 2 countries.

During the archetypal 9 months of the fiscal twelvemonth ending March 2026, India's exports to mainland China person risen astir 37%, portion shipments to Hong Kong person jumped much than 25%.

Earlier this week, India's Foreign Secretary Vikram Misri met Vice Minister of the International Department of the Communist Party of China Sun Haiyan successful New Delhi to discuss the "progress made successful stabilizing and rebuilding bilateral ties with precedence connected concern and people-centric engagements."

Relations betwixt the 2 countries person been thawing since Prime Minister Narendra Modi and Chinese President Xi Jinping met astatine the Shanghai Cooperation Organization summit in September sharing a imaginativeness of being partners not rivals.

China has emerged arsenic India's largest goods trading partner, doing concern worthy $110.20 cardinal betwixt April and December 2025, upstaging the U.S. astatine $105.31 billion, information from the India's commerce ministry shows.

But India's widening commercialized shortage with Beijing and borderline disputes person been a bony of contention betwixt the two. The country's commercialized equilibrium with China is successful crisp opposition with the U.S.

New Delhi runs a commercialized surplus with Washington, portion it's commercialized shortage with Beijing has been soaring. During April to December, India's commercialized surplus with the U.S. was much than $26 billion, shortage with China stood astatine $81.7 billion.

In fiscal twelvemonth 2025, India traded goods worthy $131.84 cardinal with Washington and $127.71 cardinal with its Asian neighbor, not accounting for Hong Kong.

India's merchandise commercialized shortage for December rose 21.4% twelvemonth connected twelvemonth to $25 billion. The country's merchandise exports successful December roseate 1.9% portion imports grew 8.8% compared to a twelvemonth ago.

However, the shortage was little than a Reuters canvass estimation of $27 billion.

Exports had registered a astonishment maturation of 19.4% successful November, with shipments to the U.S. rising 22.6% amid hopes a imaginable deal.

India's commercialized caput Rajesh Agrawal connected Thursday said that New Delhi was "very near" to finalizing a woody with Washington but refused to enactment a deadline to it, according to home media reports.

Despite the 2 sides being engaged successful negotiations for months, a woody has been elusive. U.S. Commerce Secretary Howard Lutnick connected a podcast past week said the India–U.S. commercialized woody fell done due to the fact that Prime Minister Modi did not telephone President Trump.

"I acceptable the woody up. But Modi had to telephone President Trump. They were uncomfortable with it, truthful Modi didn't call," Lutnick said.

The Indian broadside has called these comments "inaccurate."

U.S. Ambassador to India, Sergio Gor, who took complaint past week, has said that finalizing a commercialized woody with a ample federation similar India is "not an casual task to get this crossed the decorativeness line, but we are determined to get there."

India, which has ambitions to go an export powerhouse, has been looking to diversify its exports to marque up for the interaction of U.S. tariffs.

Agrawal said that the state was adjacent to signing a much-awaited commercialized woody with the European Union this month, according to a study by Reuters.

Since U.S. tariffs were announced, India has entered into commercialized pacts with the UK, Oman arsenic good with New Zealand which volition beryllium signed successful the archetypal half of 2026.

India has a "well-diversified and resilient export footprint," said S. C. Ralhan, president, Federation of Indian Export Organisations, highlighting UAE, China, Netherlands, UK and Germany arsenic India's apical export destinations successful summation to the U.S.

"This diversification is peculiarly captious astatine a clip erstwhile planetary commercialized routes are being reshaped owed to geo-political conflicts, sanctions, shipping disruptions and strategical realignments, helium said successful a statement.