India-China trade reset: New talks begin on trade concerns, supply chains; more meetings expected

India and China have begun discussions to address key bilateral trade concerns, including the structural trade imbalance and supply chain issues, with more meetings expected to take the engagement forward, Commerce Secretary Rajesh Agrawal said on Tuesday.

Agrawal said the recent meeting between Commerce and Industry Minister Piyush Goyal and his Chinese counterpart Wang Wentao was an initial discussion aimed at understanding each other's positions on various trade-related matters.

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"I think there will be meetings subsequently also to take these discussions forward. These discussions are happening after a long gap," Agrawal told reporters.

He said both sides would need to put forward their concerns and positions on issues raised by the other country to take the discussions forward.

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Agrawal said bilateral relations have improved over the past year in areas such as people-to-people movement and direct air connectivity between India and China.

"Both sides should work together to address each other's concern in the trade space...also look at the structural trade imbalance, supply chain issues, and how to build trust in the trade between the two sides," he said.

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The Commerce Secretary added that both countries are engaged in understanding each other's positions on several trade-related issues.

"So this is a work in progress. On trade, we have started engaging. Both sides are engaging very positively," Agrawal said.

India-China trade deficit remains a key concern

The meeting between Goyal and Wang on September 12 assumes significance as China remains India's second-largest trading partner.

Bilateral trade between the two countries increased 7.9% to USD 127.7 billion in 2025-26, compared with USD 118.39 billion in 2024-25.

India's exports to China rose 36.62% to USD 19.47 billion in 2025-26 from USD 14.25 billion a year earlier. However, imports from China also increased 16% to USD 131.62 billion.

As a result, India's trade deficit with China widened to USD 99.19 billion in 2025-26, compared with USD 85 billion in the previous fiscal year. The widening trade deficit remains a major area of concern for India.

Supply chain issues and China investments on agenda

The two countries are also looking to address supply chain-related concerns and build greater trust in bilateral trade.

Agrawal said India is open to engaging with China to find solutions to trade-related issues, including structural imbalances and supply chain concerns.

"We are also open to engaging with them to find solutions to our trade issues in a manner so that we can structure, we can address supply chain issues, we can address structural and trade imbalances," he said.

Investment from China is another area of concern. India has tightened its foreign direct investment (FDI) policy for countries sharing a land border with India.

India received USD 2.51 billion in FDI from China between April 2000 and March 2026, according to the figures cited.

India-China trade in April-August 2026

India's exports to China increased to USD 9.61 billion during April-August 2026-27, compared with USD 6.93 billion during the corresponding period a year earlier.

Imports from China rose to USD 65.49 billion during the period, up from USD 51.56 billion a year earlier.

The main export sectors that recorded healthy growth included engineering goods, electronic items, petroleum products, organic and inorganic chemicals, and iron ore.

More India-China trade meetings expected

The latest engagement marks an effort by both sides to gradually address long-standing trade concerns after a prolonged gap.

Agrawal indicated that further meetings are expected, with both countries likely to put forward their respective concerns and positions as discussions progress.


Inputs from PTI