Prime Minister Narendra Modi and Chinese President Xi Jinping on Saturday agreed on the need to address concerns over the structural trade imbalance between India and China, supply chain issues and the need for meaningful and predictable market access, the Ministry of External Affairs (MEA) said.
The two leaders held bilateral talks on the sidelines of the BRICS Summit 2026 in New Delhi, with economic and trade relations featuring prominently in their discussions. The meeting marked Xi’s first visit to India in nearly seven years and the third consecutive year in which the two leaders have met, following their meetings in Kazan and Tianjin.
The deficit rose to $112.16 billion in 2025-26, from $99.21 billion in 2024-25. India’s exports to China increased 36.62 per cent to $19.47 billion in 2025-26 from $14.25 billion a year earlier. However, imports from China rose 16.03 per cent to $131.63 billion from $113.46 billion, pushing the trade deficit higher. Overall, India’s merchandise trade with China increased 18.31 per cent to $151.10 billion in 2025-26. Four sectors- electronics, machinery, computers and organic chemicals -account for roughly 66 per cent of these imports, according to a GTRI report. China supplies around 43 per cent of India’s electronics imports and 40 per cent of machinery and computer imports, making these products important inputs for domestic manufacturing rather than merely discretionary consumer goods. The country imports more than 40 per cent of six key critical minerals from China, creating vulnerabilities for sectors such as renewable energy, electric vehicles and defence.
Any restrictions or withholding of these exports by China can therefore trigger disruptions across Indian supply chains.
Modi and Xi underlined the need to address each other’s concerns on economic and trade relations, particularly the structural trade imbalance and supply chain issues, according to the MEA. “The two leaders took note of the progress in people-to-people ties and underscored the need to further promote cultural exchanges, business linkages, and greater mobility between the two countries,” the MEA said. During the meeting, Xi said China-India relations had developed with both sides keeping the long-term development of bilateral ties in mind from a strategic perspective. The Chinese president also highlighted the scope for cooperation despite differences between the two countries, saying China and India could “support and help each other to achieve common development”. We now have the opportunity to discuss bilateral cooperation,” the Prime Minister said. (with IANS inputs)
The two leaders also stressed the importance of facilitating meaningful and predictable market access as part of efforts to strengthen economic ties. The issue has gained urgency as India’s trade deficit with China has continued to widen. China has also overtaken the US to become India’s largest trading partner. The trade imbalance, however, is not simply about Chinese consumer products entering the Indian market. A significant share of India’s imports from China consists of industrial inputs, components and capital goods used by Indian manufacturers to produce goods and create jobs. India’s dependence also extends to critical minerals. The GTRI report has warned that the structural imbalance leaves India’s clean energy, electronics and pharmaceutical sectors exposed to potential disruptions involving critical raw materials. Modi, meanwhile, thanked China for its support and cooperation during India’s BRICS chairship. “I express my gratitude for the support and cooperation received from China during India’s BRICS chairmanship.
