New Delhi, September 12 (Daily Kiran) : Prime Minister Narendra Modi and Chinese President Xi Jinping met in New Delhi on September 12, 2026, where they addressed the growing trade imbalance between their countries. The leaders emphasized the need for meaningful and predictable market access and discussed issues related to supply chains. This information was released by the Ministry of External Affairs following their meeting.
During their discussions, both leaders welcomed the progress in people-to-people connections and stressed the importance of enhancing cultural exchanges, trade relations, and the movement of citizens between the two nations.
The statement indicated that during their talks on economic and trade relations, they agreed on the necessity of resolving structural trade imbalances and supply chain concerns, while ensuring better and more reliable market access.
This bilateral meeting took place on the sidelines of the ongoing BRICS Summit 2026 in New Delhi. It marked President Xi’s first visit to India in nearly seven years and the third consecutive year that Modi and Xi have met, following previous encounters in Kazan and Tianjin.
President Xi remarked that China and India have strategically advanced their long-term bilateral relationship. He noted that despite differences, both countries have been able to support each other in achieving shared developmental goals.
Prime Minister Modi expressed gratitude to President Xi for China’s cooperation during India’s BRICS presidency. He highlighted the opportunity for both nations to discuss various areas of bilateral cooperation in detail.
The trade deficit between India and China has been steadily increasing over recent years, reaching $112.16 billion in the fiscal year 2025-26, up from $99.21 billion in 2024-25. This growing deficit underscores the need for a balanced and sustainable trade relationship.
In the fiscal year 2025-26, India’s exports to China rose by 36.62% to $19.47 billion, while imports from China increased by 16.03% to $131.63 billion, further widening the trade gap.
During this period, total merchandise trade between India and China grew by 18.31% to $151.10 billion. China has now surpassed the United States to become India’s largest trading partner. However, the trade imbalance is not limited to consumer goods; India imports significant quantities of industrial raw materials, machinery, electronic equipment, computers, and capital goods from China, essential for domestic production and job creation.
According to a report by the Global Trade Research Initiative (GTRI), four key sectors—electronics, machinery, computers, and organic chemicals—account for approximately 66% of India’s imports from China. India sources about 43% of its electronics and around 40% of its machinery and computer imports from China.
The report also noted that India imports over 40% of its requirements for six critical minerals from China. This dependency affects supply chains in sectors such as renewable energy, electric vehicles, electronics, pharmaceuticals, and defense. A halt or restriction on these exports from China could significantly impact India’s supply chains.
Conversely, China is looking for relaxed investment regulations in India, hoping that its companies can invest more in the rapidly growing Indian market.
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