India and China have begun discussions to address key bilateral trade concerns, including the widening trade imbalance, supply chain issues and ways to build greater confidence in economic relations. More meetings are expected as both sides continue discussions.

Commerce Secretary Rajesh Agrawal said the recent meeting between Commerce and Industry Minister Piyush Goyal and Chinese Commerce Minister Wang Wentao was an initial step aimed at understanding each country's position on trade-related issues. The meeting took place on September 12 on the sidelines of the BRICS Summit.

Agrawal said further discussions are expected, with both sides likely to put forward their concerns and positions on issues affecting bilateral trade. He described the engagement as a work in progress and said the two countries are engaging positively.

Trade imbalance remains a key issue

The widening trade deficit is one of India's major concerns in its economic relationship with China.

According to trade data, bilateral trade rose 7.9% to USD 127.7 billion in 2025-26, compared with USD 118.39 billion in 2024-25. India's exports to China increased 36.62% to USD 19.47 billion, while imports from China rose 16% to USD 131.62 billion.

As a result, India's trade deficit with China reached USD 99.19 billion in 2025-26, compared with around USD 85 billion in the previous fiscal year.

The figures highlight the gap between India's exports to China and its imports from the country, making trade balance an important issue in the ongoing discussions.

Supply chains and investment also on the agenda

Supply chain resilience is another key area being discussed by the two countries. Agrawal said both sides are looking at ways to address supply chain concerns and structural imbalances while building greater trust in bilateral trade.

Chinese investment in India is also part of the broader economic relationship. India has maintained restrictions on foreign direct investment from countries sharing a land border with India. According to figures cited by the Commerce Ministry, India received USD 2.51 billion in FDI from China between April 2000 and March 2026.

India-China trade continues to grow

Trade between the two countries has continued to expand despite the imbalance.

During April-August 2026-27, India's exports to China increased to USD 9.61 billion, compared with USD 6.93 billion during the same period a year earlier. Imports from China rose to USD 65.49 billion, from USD 51.56 billion.

India recorded export growth across sectors including engineering goods, electronic items, petroleum products, organic and inorganic chemicals, and iron ore.

More meetings expected

The latest trade engagement comes after a prolonged gap in high-level economic discussions. Both countries are now expected to continue talks on trade concerns, supply chains and the structural imbalance.

Agrawal indicated that the process is still at an early stage, with further meetings expected as India and China work to understand each other's concerns and positions.

The renewed engagement could provide a platform for discussions on market access, supply chain issues, trade imbalance and investment, although the outcome will depend on the positions adopted by both sides in subsequent negotiations