India recorded a significant rise in exports to China in December 2025, while its shipments to the U.S. saw a slight decline. The changes reflect New Delhi’s shift toward diversifying export markets in response to elevated tariff barriers imposed by Washington.
According to official data released Thursday, Indian exports to China jumped 67% year-on-year to $2 billion in December. In contrast, goods shipped to the U.S. fell 1.8% to $6.8 billion over the same period.
The decline in U.S.-bound shipments follows the White House’s decision to implement 50% tariffs on Indian products, a move that places New Delhi among the hardest-hit countries and has strained bilateral trade relations. This development has prompted Indian exporters to intensify their efforts in alternative markets.
Between April and December 2025, India’s exports to mainland China increased by nearly 37%, and those to Hong Kong rose by over 25%. During this period, China became India’s top trading partner for goods, reaching $110.20 billion in bilateral trade and overtaking $105.31 billion that of the U.S., according to India’s commerce ministry.
Despite growing engagement, India’s trade deficit with China continued to widen, standing at $81.7 billion from April to December, while its surplus with the U.S. exceeded $26 billion. In the 2025 fiscal year, India’s total goods trade was valued at $131.84 billion with the U.S. and $127.71 billion with mainland China.
December merchandise exports rose 1.9% year-on-year to $38.51 billion, while imports advanced 8.8% to $63.55 billion. Trade deficits for the month widened 21.4% year-on-year to $25 billion, though the figure was below economists’ projections.
India’s strategy to offset U.S. tariff headwinds has included pursuing new and expanded trade arrangements with economies, including the U.K., Oman, and New Zealand, alongside ongoing negotiations with the European Union. According to the Federation of Indian Export Organisations, this diversification is a key response to global disruptions and shifting trade routes.
Talks on a bilateral trade deal between India and the U.S. have continued, though recent procedural setbacks delayed a resolution. Indian officials stated they are close to concluding deals with the EU and other partners, while discussions with U.S. negotiators remain active with no set deadline.
