Chennai: After a gap of four years, China has again become India’s largest trade partner. India’s trade deficit with China too has hit a record high in FY26.

With a bilateral trade of $151.1 billion, China is the largest trade partner, leaving the US with $140.2 billion in the second slot. China was India’s top trading partner from 2013-14 till 2017-18. While the US trade surged in FY19 and Chinese trade was affected by the pandemic breakout in FY20, China occupied the position in 2020-21. Since then, the US has been holding that position. Prior to FY14, UAE was India’s largest trade partner.

While the total trade with China has gone up in FY26, the imports had a major role in this. India’s exports to China rose 36.66 per cent to $19.47 billion during the last fiscal year, while imports increased 16 per cent to $131.63 billion. This led to a record high trade deficit of $112.16 billion, underscoring India’s dependence on Chinese electronics parts, machinery, chemicals, battery components and pharmaceutical ingredients. The trade deficit with China has crossed $100 billion for the first time and this happened in February itself.

In the case of the US, exports grew marginally 0.92 per cent to $87.3 billion during the last trade partner last fiscal year due to higher tariffs, while imports increased 15.95 per cent to $52.9 billion. The trade surplus declined to $34.4 billion in FY26 from $40.89 billion in FY25.

India’s exports declined to countries, including Netherlands, the UK, Singapore, Saudi Arabia, Australia, France, and South Africa. Exports to the UAE, Germany, Italy, Brazil, Spain, Belgium, and Vietnam registered positive growth.

Due to lower crude imports, shipments from Russia declined. Australia, Qatar, and Taiwan also exported less to India.