According to thehindubusinessline.com, a report by Koan Advisory Group and the Institute of Chinese Studies (ICS) found that China accounted for at least 80% of India’s imports across 71 eight-digit tariff lines in 2025–26.
Deepening supply chain integration
The study shows this dependence reflects deepening supply chain integration—not just price-driven sourcing of finished goods. Of the 71 tariff lines where China held ≥80% import share, 46 crossed that threshold only after 2018–19, indicating rising concentration over time. India’s trade deficit with China reached $112.1 billion in 2025–26, its largest bilateral deficit.
Core components drive import reliance
India’s import dependence centers on a narrow set of upstream inputs: motors, electrical machinery, cables, and switching equipment—key components used across telecom infrastructure, consumer electronics, industrial machinery, and electrical equipment. As Samira Sarah Abraham, Economics Lead at Koan Advisory Group and co-author of the report, stated:
“The depth of integration that has emerged across these product categories is a reality of the two economies. India’s manufacturing ambitions will be better served by finding ways to work with this integration rather than simply seeking to reverse it.” — Samira Sarah Abraham, Economics Lead, Koan Advisory Group
Lithium-ion batteries illustrate opportunity and challenge
Lithium-ion batteries exemplify both the scale and strategic implications of this integration. In 2025–26, China supplied 83.6% of India’s lithium-ion battery imports—crossing the 80% threshold for the first time that year. India’s imports of these batteries from China surged to $3.9 billion, more than doubling since 2021–22. The report notes this access supports domestic expansion in electric mobility and energy storage—but only if paired with targeted policies to increase local value addition.
Semiconductor sourcing remains highly concentrated
China remained the dominant source of India’s semiconductor (HS 8541) imports in 2025–26, supplying 48.9% of total imports—down from ~64% in 2024–25. Singapore followed with 8.4%, Indonesia with 7.5%, and Vietnam with 6.6%. Santosh Pai, Member of the Governing Council at ICS, emphasized that policy must prioritize “targeted localisation and accelerated value addition in specific high-impact segments,” given the concentration in upstream, component-level manufacturing.
Source: thehindubusinessline.com
Compiled from international media by the SCI.AI editorial team.
