China Tops US as India's Largest Trading Partner FY26

China reclaimed its position as India's largest trading partner in FY26, displacing the United States, as bilateral trade expanded sharply on both sides of the ledger. India's exports to China rose 36.66% to $19.47 billion, while imports climbed 16% to $131.63 billion, pushing the total trade volume to roughly $151 billion. The trade deficit widened to $112.16 billion, underscoring the structural asymmetry in the relationship despite the export surge. The US had held the top trading partner slot in recent years, making China's return a notable reversal driven by import volume rather than balanced exchange. India's heavy reliance on Chinese imports, spanning electronics, chemicals, and machinery, continues to define the gap. The widening deficit will sharpen scrutiny on New Delhi's push to build domestic manufacturing capacity and reduce supply-chain dependence on Beijing. With India-US trade relations also under active negotiation, how New Delhi manages both relationships simultaneously will be a central strategic and commercial question through the next fiscal year.