Over $3bn and Counting: What’s Fuelling India’s Export Surge to China?

India’s exports to China have surged by nearly 40% in the five months through August, driven largely by a growing demand for electronics and engineering goods. This development has significant implications for global supply chains and highlights India’s efforts to establish itself as a key player in the region.

The world’s fastest-growing major economy is increasingly looking to China as a gateway to the Asian market. The recent export growth suggests that New Delhi’s strategy may be paying off – at least, to some extent. Electronics exports have been a major contributor to this increase, with shipments rising more than 15% in the April-August period from a year earlier.

Industry executives point to demand linked to artificial intelligence and data centers as driving forces behind this growth. As AI-related products proliferate worldwide, India is positioning itself as a key supplier of high-end equipment. The country’s growing presence in global supply chains is a major factor behind this surge, with Indian manufacturers finally gaining traction – albeit incrementally.

However, there’s another story hidden beneath the surface: China remains a small destination for Indian goods. Despite the export surge, Beijing still accounts for just 4.4% of India’s exports in the year ended March. The trade deficit with China remains large, standing at over $112 billion in 2025-26.

Industry executives are clear-eyed about the challenges ahead. “The task now is to sustain these exports and expand across components, sub-assemblies and finished products, while deepening Indian design and component capabilities,” said Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association.

India-China engagement on trade issues has gained momentum in parallel with this export growth. The two countries are exploring ways to address structural trade imbalances, supply-chain issues, and building trust in bilateral trade. As commerce secretary Rajesh Agrawal noted, “Both sides should work together to address each other’s concerns in the trade space.”

The recent export growth is part of a broader effort by New Delhi to diversify its economy and build resilience against global headwinds. India’s electronics industry has long been plagued by a lack of local content and dependence on imports. The surge in exports suggests that Indian manufacturers are finally making progress towards self-sufficiency.

As the world grapples with the aftershocks of the US-China trade war, one region is bucking the trend: South Asia. India’s growing presence in global supply chains is a story worth watching closely.