Jaishankar meets China's Wang Yi, flags trade imbalances & supply chain concerns

Indian Foreign Minister S Jaishankar said on Wednesday that he told his Chinese counterpart Wang Yi that the two countries needed to address important aspects of their relationship, particularly fair market access and the trade balance, as New Delhi and Beijing continue efforts to normalise bilateral ties.

“There are also concerns about predictability of supply chains,” Jaishankar said in a post on X after meeting Wang on the sidelines of a regional gathering in Manila.

“We also need to agree on the meetings of various mechanisms and platforms as per our mutual priorities,” he added.

Jaishankar said he had a “wide ranging discussion” with Wang, who is also a member of the Chinese Politburo.

The meeting took place against the backdrop of a gradual thaw in India-China relations, with both sides taking steps to restore diplomatic, economic and people-to-people ties after years of tensions.

More from India

India flags market access, trade balance

Jaishankar said fair market access and a balanced trade relationship remained among the important issues that needed to be addressed.

China is one of India's biggest trading partners and a major source of machinery, electronics, chemicals, pharmaceutical ingredients and other industrial goods.

Indian businesses, meanwhile, have long sought greater access to the Chinese market for sectors including pharmaceuticals, information technology, agricultural products and engineering goods.

India's trade deficit with China has remained a key concern for New Delhi. The government has also sought to expand domestic manufacturing and diversify supply chains, while reducing excessive dependence on imports from any single country.

Jaishankar's remarks indicate that economic concerns remain central to the next phase of the India-China relationship, even as diplomatic ties gradually improve.

Supply chain predictability a concern

Jaishankar also highlighted concerns over the predictability of supply chains.

The issue has significant implications for Indian manufacturers that continue to rely on China for components, raw materials, machinery and other industrial inputs.

Chinese suppliers are deeply integrated into several sectors, including electronics, solar equipment, auto components, chemicals and pharmaceuticals.

While India has been working to build domestic manufacturing capacity and diversify sourcing, ensuring stable and predictable supplies remains important for businesses that continue to depend on Chinese inputs.

India’s China imports rise 28%

India imported goods worth roughly $38.04 billion from China between April and June, according to the latest trade data published by the Ministry of Commerce and Industry.

That was up from around $29.73 billion in the same period of 2025.

India’s exports to China also increased during the quarter, rising 27.5 per cent to approximately $5.6 billion from around $4.39 billion a year earlier.

The figures highlight the persistent imbalance in bilateral trade, with Indian imports from China far exceeding exports.

China has been the biggest source of goods for the Indian economy for at least the past five years.

India’s imports from China increased from $76.3 billion in 2017-18 to $131.6 billion in 2025-26.

Imports from China rose from $101.7 billion in 2023-24 to $113.4 billion the following year, before increasing a further 16 per cent to $131.6 billion in 2025-26.

Electronics drive import growth

A large share of India’s imports from China consists of electronic goods.

In 2025-26, India imported electronic goods worth around $46.36 billion from China.

The trend has continued into the current financial year. India’s imports of electronic goods rose 43.7 per cent in the first quarter of 2026-27 to $38.46 billion, compared with $26.75 billion in the same period a year earlier.

The increase comes even as India’s own electronics manufacturing and exports have expanded rapidly.

India has emerged as a major global manufacturing base for Apple’s iPhones, with the country increasingly supplying smartphones to international markets.

The rising imports of electronic goods reflect the complex nature of India’s trade relationship with China. While India is expanding domestic production and exports of electronics, Chinese components and equipment remain deeply embedded in the supply chains supporting that growth.

China remains key machinery supplier

China is also India’s biggest source of machinery.

India imported machinery worth around $29.45 billion from China in 2025-26.

Machinery imports from China increased to $16.68 billion in the first quarter of the current financial year, compared with $14.09 billion in the same period last year.

The figures underline the challenge facing India as it seeks to reduce excessive dependence on Chinese imports while maintaining access to industrial inputs needed by domestic manufacturers.

India cautiously eases some China-related curbs

India has in recent months cautiously eased some restrictions on Chinese-linked businesses and investments as New Delhi and Beijing have sought to stabilise bilateral ties.

In March, India said it would fast-track approvals for investments from companies with minor Chinese stakes.

The move was aimed at supporting domestic manufacturing and attracting foreign capital.

Earlier this month, India also allowed four Chinese-linked power equipment manufacturing companies to bid for government projects.

The government has eased investment restrictions affecting sectors including capital goods, electronic capital goods and electronic components.

New Delhi has sought to calibrate the restoration of market access for Chinese-linked companies while continuing to maintain safeguards in sensitive areas.

India-China ties gradually normalising

In his opening remarks before the meeting, Jaishankar said India-China relations had been “gradually normalizing” since Prime Minister Narendra Modi and Chinese President Xi Jinping met in Kazan in October 2024.

The direction was further affirmed when the two leaders met in Tianjin last August, he said.

Jaishankar said the steps taken towards normalisation in recent months should be welcomed.

These include the resumption of direct flights, updates to the visa regime, the restarting of the Kailash Manasarovar Yatra and the recommencement of border trade.

However, he said important dimensions of the relationship still needed to be addressed.

“Facilitating both official and people-to-people exchanges merit our attention,” Jaishankar said.

He also said the two sides needed to agree on meetings of various mechanisms and platforms according to their “mutual priorities”.

‘Differences should not become disputes’

Jaishankar said India and China, as two large and important neighbouring countries, would naturally have their own particular interests.

“That is why our leaders had agreed that differences should not become disputes. It is the responsibility of diplomacy to properly manage them,” he said.

He said a stable and cooperative relationship could best be developed on the basis of “mutual respect, mutual interest and mutual sensitivity”.

Such a relationship could make a valuable contribution to a “multi-polar Asia and a multi-polar world”, Jaishankar said.

Border peace remains prerequisite

Jaishankar said peace and tranquillity in the border areas remained a prerequisite for normal ties between India and China.

“Since October 2024, both sides have engaged to ensure that important objective. This will continue to need our constant attention,” he said.

He added that relevant mechanisms dealing with the border situation needed “full support and strong encouragement”.

The comments come amid efforts by New Delhi and Beijing to stabilise relations after a period of heightened tensions along the Line of Actual Control.