Indian Exports to China Rise 40% Driven by AI Demand

Indian exports to China grew nearly 40% in the five months ending August 2026, with electronics and engineering goods serving as the primary drivers. Shipments of electronics, including smartphones, telecom equipment, and printed circuit board assemblies, tripled to $3.18 billion in the fiscal year ending March.

The Government of India reported these gains, which industry leaders link to the global expansion of data centers and AI-related equipment. Pankaj Mohindroo, chairman of the India Cellular and Electronics Association, stated that Indian manufacturing is winning credibility in global value chains. This growth suggests a shift in the geopolitical environment, even as the United States remains the largest market for Indian goods.

Despite the export surge, India continues to maintain a significant trade deficit with China. In the year ending March, India imported $131.6 billion of Chinese goods, accounting for nearly 17% of its total imports. Discrepancies remain between the two nations regarding trade data, specifically how the Government of China classifies imported printed circuit boards compared to Indian records.