New Delhi: Spurred by merchandise imports and rising prices of petroleum and related products, India’s trade deficit with China widened very significantly in June 2026 to $15.3 billion – a 430% jump over a one year period, reports the Hindu. India’s exports to China rose 27.5% to $5.6 billion over this time.India’s trade deficit for the entire year (2026-27), will exceed last year’s $116 bn, said the Hindu, based on the current figure of $67 bn. In the first half of 2026, India’s imports from China touched a record $79.41 billion.At the same time, India’s exports to China have also registered strong growth, up by 37.2% to $12.31 billion in the first half of 2026-27.The nature of India’s exports to China continues to raise concerns as much as the quantum of the trade deficit. Last year, NITI Aayog CEO B.V.R. Subrahmanyam reportedly said, “If you are not able to sell much to China, it is pointless, because it’s an 18-trillion-dollar economy.”While his remarks advocate greater trade engagement with China (“widening basket of goods”), India later made significant policy changes to allow Chinese-backed investments in the domestic market after a long freeze.In an apparent response to the concerns expressed in India, Chinese embassy spokesperson Yu Jing on X on Wednesday, July 14, wrote on X: “We welcome more premium Indian products into Chinese market, which is the world’s second-largest importer with 500 million middle-class consumers.” She added that “China has never deliberately pursued a trade surplus with India”.She wrote that India’s imports from China were worth $30.8 billion between April and June 2026, the first quarter of the 2026-27 financial year.On July 4, the Hindu reported India’s ambassador to China Vikram Doraiswami as saying that India would like to “be able to” export more to China. “This is nothing unreasonable about suggesting that,” he reportedly said. Doraiswami stressed on India’s desire for imports from China to be such that value-addition could take place domestically.“If it is pure consumption goods, that becomes a little harder to sell as a reasonable mechanism [explanation] for the deficit,” Doariswami reportedly said at the World Peace Forum, an annual foreign policy forum in Beijing.India has for long sought to boost exports to China of more value-added items, moving away from raw material and has made slow progress towards intermediary good.Yu wrote on the topic: “China has never deliberately pursued a trade surplus with India.” She stressed that the electronic components, machinery and intermediate goods exported from China “support” India’s manufacturing expansion, job creation and industrial upgradation.According to commerce ministry data, China was India’s largest trading partner in 2025-26.In March last year, the situation vis-a-vis trade with China had similar concerns over the basket of goods. Jitin Prasada, minister of state for commerce and industry had informed Lok Sabha that the goods were mainly raw materials, intermediate goods and capital goods such as active pharmaceutical ingredients, auto components, electronic parts and assemblies, mobile phone parts, “which are used for making finished products which are also exported out of India”.He referred in the response to ‘Make in India’, ‘Make in India 2.0’, ‘Atmanirbhar Bharat’ and the Production Linked Incentive (PLI) scheme, all geared to promote domestic manufacturing since 2014, apart from schemes aimed to ease goods transportation and logistics services.The PLI scheme has had a very modest impact, attracting roughly Rs 1.6 lakh crore across 14 sectors as per the government’s own data by November 2025, which rose to Rs 2.16 lakh crore as per data shared in February 2026. The scheme was launched in 2020. The government provides cumulative figures for these investments.Apart from cost and scale factors, Indian experts have pointed to non-trade barriers and other restrictions limiting exports to China. Of late, the Indian government has stressed on quality concerns and standards as well. Earlier this year, China restricted Indian exports of rice and chilli. China has also moved to restrict exports of rare earth minerals.India has also imposed anti-dumping duties on certain categories of Chinese imports such as plastic machines, hoping to stave off the impact of China’s low-cost production.