New Delhi: China’s decision to ease restrictions on exports of rare-earth minerals and fertilisers to India is a positive signal, but India must work to reduce its dependence on the neighbouring country, with which it runs an alarming USD 100 billion trade deficit, economic think tank GTRI said on Wednesday.
It said that between 2014 and 2024, China’s dominance over India’s import landscape only widened.
Its share in India’s telecom and electronics imports reached 57.2%, while machinery and hardware accounted for 44%. Chemicals and pharmaceuticals followed closely at 28.3%.
For India, the Global Trade Research Initiative (GTRI) said, the only real safeguard is to build strength at home by cutting dependence, investing in deep manufacturing, and becoming a true product nation.
“A stronger, more self-reliant India will be better placed to engage China on equal terms, while keeping relations steady and pragmatic rather than hostage to sudden shifts,” GTRI Founder Ajay Srivastava said.
India’s trade deficit with China, which hit a record USD 100 billion in FY2025, is not just alarming in scale but also in structure, it said.
“What makes it more serious is that China now dominates India’s import baskets across virtually every industrial category -- from pharmaceuticals and electronics to construction materials, renewable energy, and consumer goods,” it added.
Citing examples, the think tank said in antibiotics like erythromycin, China supplies 97.7% of India’s needs; in electronics, it controls 96.8% of silicon wafers and 86% of flat panel displays; in renewable energy, 82.7% of solar cells and 75.2% of lithium-ion batteries come from China. Everyday products such as laptops (80.5% share), embroidery machinery (91.4%), and viscose yarn (98.9%) are sourced from China.
Srivastava said this overwhelming dominance gives Beijing potential leverage against India, turning supply chains into a tool of pressure in times of political tension. “The imbalance is deepening as India’s exports to China continue to decline, reducing India’s share in bilateral trade to just 11.2 per cent today from 42.3 per cent two decades ago. Such structural dependence exposes India to serious geopolitical risks and highlights the urgent need for domestic production capacity and resilient supply chains,” he added.