Seizing the moment: India’s export opportunity in the Chinese market

India and China, two of the world’s fastest-growing economies, are cautiously steering towards a thaw—evident in the positive signals from the recent SCO Summit. Yet, their economic ties remain among Asia’s most complex. Trade has ballooned over the years, but the imbalance is striking: India’s imports from China hit US$ 109 billion in 2024, while exports stood at just US$ 15.1 billion.

Still, untapped opportunities abound in sectors like organic chemicals, fish, and crustaceans. With sharper interventions—scaling production, raising quality standards, diversifying exports, and tapping into China’s high-demand regions—India could capture significant gains. But this ambition must confront structural barriers: non-tariff measures, regulatory hurdles, and the lack of preferential market access.

The moment is ripe. If India leverages the diplomatic momentum and addresses systemic bottlenecks, it could pave the way for a more balanced and resilient trade relationship with its powerful neighbour.

India’s trade with China reflects a persistent imbalance, a reality that has ensured that the former remains highly cautious of a comprehensive trade agreement with its northeastern neighbour. Unfortunately, the imbalance has only got worse over the years.

While India’s exports grew modestly from US$ 12.5 billion in 2017 to a peak of US$ 23 billion in 2021, they later declined to US$ 15.1 billion in 2024, accounting for around 0.6% of China’s total imports. In contrast, imports surged from US$ 71.9 billion in 2017 to US$ 109 billion in 2024, widening the trade deficit from US$ 59.4 billion in 2017 to US$ 93.8 billion in 2024. And China’s share in India’s imports is a huge 15.5%.

This deficit not only highlights India’s import dependency but also underscores the underutilization of its export potential. Against the backdrop of renewed diplomatic engagement and shifting global supply chains, the time is important for India to recalibrate its export strategy to China and seize untapped opportunities.

So what does India export to China

In 2024, India’s exports to China totaled significant value, with Iron Ores, slag, and ash leading at US$ 2.6 billion (HS 26, share of 17%), followed by Organic chemicals (HS 29, share of 8.3%) at US$ 1.3 billion and Mineral fuels (HS 27, share of 8.1%) at US$ 1.2 billion. Nuclear reactors, boilers (HS 84, share of 7.5%) and Fish and crustaceans (HS ’03, share of 7.5%) each contributed US$ 1.1 billion, while Animal, vegetable, or microbial fats (HS 15, share of 5.7%) and Electrical machinery (HS 85, share of 5.4%) added US$ 0.86 billion and US$ 0.82 billion, respectively. Other categories accounted for around 40.5% of exports, indicating a diverse range of goods, suggesting a balanced mix of natural resources, processed goods, and emerging manufactured items.

In 2024, India’s top ten exports at HS Code 6 digit level to China showcased a mix of raw materials, agricultural products, and select industrial goods, together reflecting both strengths and gaps in the bilateral trade basket. Non-agglomerated iron ores (HS 260111) led with US$ 1.75 billion, followed by light oils of petroleum (HS 271012) worth US$ 1.2 billion, together accounting for nearly one-fifth of total exports. Other notable items included agglomerated iron ores (HS 260112) at US$ 759 million and frozen shrimps and prawns (HS 030617) at US$ 752 million, underlining the importance of seafood trade.

Agro-based exports like castor oil (HS 151530) at US$ 512 million, dried capsicum (HS 090421) at US$ 462 million, and crude groundnut oil (HS 150810) at US$ 340 million reflect India’s strong agricultural base. Niche products such as dressed human hair (HS 670300) at US$ 476 million and industrial goods like telephone parts (HS 851779) at US$ 346 million and unwrought aluminium (HS 760110) at US$ 270 million add further diversity. While this portfolio highlights India’s strengths in natural resources and agri-based exports, the relatively modest presence of high-technology and value-added products signals untapped opportunities for diversification.

In 2024, India’s imports from China stood at US$ 109 billion, with trade heavily concentrated in a few product categories. Electrical machinery dominated with US$ 36.24 billion, accounting for 33% of total imports, followed by nuclear reactors and related machinery at US$ 24.82 billion or 23%. Organic chemicals contributed US$ 11.14 billion (10%), while Plastics and articles thereof amounted to US$ 6.16 billion (6%). Iron and steel represented US$ 2.73 billion (3%), with the remaining US$ 27.91 billion (25%) spread across other products. This composition highlights India’s strong reliance on China for machinery, chemicals, and intermediate industrial goods.

Untapped export potential: Key sectors

Following are some of the key sectors of potential for export expansion to China

Iron ores, Slag, and Ash (HS 26) – Iron ores, Slag, and Ash remain highly promising, given China’s sustained demand for raw materials to fuel its industrial base. In 2024, these exports accounted for a 17% market share, valued at US$ 2.57 billion. However, China’s industrial demand for iron ores and other raw materials remains high, offering opportunities for scaling exports. Stabilizing supply chains and addressing policy restrictions could unlock further growth.

Top 10 products India exports to China at HS Code 6 digit level

HS Code	Product Description	Value in 2024 (US$ million)	India’s Market Share
	All Products	15137.5
‘260111	Non-agglomerated iron ores and concentrates	1757.2	11.6%
‘271012	Light oils and preparations	1209.3	8.0%
‘260112	Agglomerated iron ores and concentrates	759.2	5.0%
‘030617	Frozen shrimps and prawns,	752.1	5.0%
‘151530	Castor oil and fractions	511.6	3.4%
‘670300	Human hair, dressed, thinned,other animal hair or other …	475.7	3.1%
‘090421	Fruits of the genus Capsicum or of the genus Pimenta, dried	462.4	3.1%
‘851779	Parts of telephone sets, telephones for cellular networks	345.8	2.3%
‘150810	Crude groundnut oil	339.5	2.2%
‘760110	Aluminium, not alloyed	270.1	1.8%

Source: ITC Trade Map

Organic Chemicals (HS 29) – This sector also reflects considerable untapped potential. With a market share of 8% and exports worth US$ 1.26 billion in 2024, the sector’s consistent performance masks underlying inefficiencies. The consistent market share but declining value suggests underutilized potential, possibly due to competition or supply constraints. India’s chemical industry is robust, and China’s demand for organic chemicals is strong, indicating room for growth. By enhancing production capacity and diversifying chemical exports could tap into China’s industrial needs.

Fish and Crustaceans (HS 03) – This sector has shown steady demand in China, with exports from India valued at US$ 1.14 billion in 2024, maintaining an 8% market share. India’s aquaculture strengths and abundant coastal resources position it strongly to scale up, especially in value-added seafood products. Frozen shrimp alone accounts for US$ 752 million, indicating vast scope for growth if investments are made in processing, quality control, and compliance with China’s food safety standards.

Cereals (HS 10) – This represent another underdeveloped category, with exports valued at just US$ 58 million in 2024. This figure stands in sharp contrast to India’s vast agricultural capacity and China’s pressing food security concerns. Enhancing export logistics, ensuring consistent quality, and tailoring shipments to Chinese demand patterns could significantly increase cereal exports, especially for staples like rice and wheat.

Pharmaceutical Products (HS 30) – This stand out as a sector with immense untapped promise. Despite India’s global leadership in generic drugs, just US$ 84 million in 2024, of which medicaments account for US$ 71 million.

Given China’s rapidly expanding healthcare needs, India could substantially grow its presence by pursuing regulatory clearances, forming joint ventures with Chinese firms, and supplying affordable generics. Strategic efforts in this space could transform pharmaceuticals into a major contributor to bilateral trade.

Mineral Products (HS 27) – Another sector of opportunity is Mineral Products, with an export value of US$ 1.23 billion in 2024 and an 8% market share. Despite a steady compound annual growth rate, recent declines signal underexploited potential. Given China’s heavy dependence on energy imports, India’s crude and refined oils, as well as mineral-based products, could meet substantial demand. Competitive pricing and robust supply chain solutions, coupled with expansion into refined petroleum or alternative fuels, would help India capture more of this lucrative market.

Strategic Pathways for Enhancing Exports

To unlock the full export potential with China, India must adopt a multi-pronged approach:

1. Diversification and Up gradation – Move beyond primary commodities to medium and high-technology products, particularly in pharmaceuticals, electronics, automotive components, and aerospace.
2. Strengthening Quality Standards – Invest in laboratories, certifications, and compliance systems to ensure Indian exports meet stringent Chinese standards.
3. Bilateral Trade Facilitation – Establish dedicated mechanisms for resolving NTB-related disputes and enhancing regulatory transparency. Greater use of digital trade facilitation platforms can reduce information asymmetry.
4. Market Access Improvement – The Chinese market should facilitate easier entry for Indian products by streamlining regulatory processes and reducing trade barriers, promoting a more inclusive trade environment.
5. Branding and Market Awareness – Indian exporters need to strengthen branding in China, particularly in pharmaceuticals, gems, and processed foods, to compete effectively with established players.

Conclusion

India’s trade deficit with China remains one of its most pressing economic challenges, but it also underscores an enormous opportunity by strategically diversifying into high-technology sectors like pharmaceuticals and electronics, enhancing product quality through robust standards, and leveraging bilateral mechanisms to overcome non-tariff barriers, India can significantly elevate its export potential.

As China signals willingness to facilitate market access and global supply chains evolve, India stands at a pivotal juncture. With focused efforts on branding, targeted market penetration, and structural reforms, India can transform this trade deficit into a dynamic, mutually beneficial economic partnership, seizing the moment to redefine its role as a key player in China’s market.

Moreover, untapped export opportunities in sectors like organic chemicals, fish and crustaceans, and cereals offer substantial growth potential, especially if India boosts production capacity and aligns with China’s demand for shrimps, agricultural staples, and pharmaceutical generics. By capitalizing on these areas, India can diversify its export basket, reduce dependency, and foster a more balanced trade dynamic with its largest partner.

As geopolitical uncertainties’ currents reshape global trade patterns, India must act decisively to leverage this moment. By aligning its export strategy with China’s evolving demand and addressing structural weaknesses, India can transform its economic engagement with its largest trade partner from one of dependency to one of opportunity.