The paradox of self-reliance: India-China trade dynamics | Data Point

After the bilateral meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of the BRICS summit in Delhi on September 12, 2026, India said the two leaders had underlined the need to address each other’s concerns, including “structural trade imbalance and supply chain issues”.

This assumes significance as the widening trade deficit with China reveals a central paradox in India’s ambitious Atmanirbhar Bharat mission, launched in 2020 to bolster domestic manufacturing and reduce dependence on global supply chains, with China as the implicit target.

India is steadily building its manufacturing and export capabilities. But that expansion remains deeply embedded in China-centric, import-dependent supply chains — creating what may be called the “assembly trap” of self-reliance.

Bilateral trade touched $167.6 billion in 2025 but has become increasingly asymmetric, with imports from China rising much faster than India’s exports.