China remained the dominant source of India’s semiconductor (HS 8541) imports in 2025–26,
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As India and China seek new avenues for a closer economic relationship on the eve of the BRICS Summit, a new study on trade flows reveal that the country’s rising electronics imports from China reflect a deepening integration of supply chains rather than merely a dependence on price-competitive finished goods, said a report on Wednesday.At a granular level, the study released by Koan Advisory Group in partnership with the Institute of Chinese Studies (ICS) revealed that China accounted for at least 80 per cent of India’s imports across 71 tariff lines at the eight-digit level in 2025-26.Of these, 46 crossed the 80 per cent threshold only after 2018-19, pointing to a rise in import concentration over time. India’s trade deficit with China stood at $112.1 billion in 2025-26, the country’s largest bilateral trade deficit, it said.Core partsNotably, India’s import dependence is centred on a small set of core components including motors, electrical machinery, cables, and switching equipment. These constitute inputs used across electrical equipment, telecom infrastructure, consumer electronics and industrial machinery, the study highlighted.“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, and one of the authors of the report, said.The deepening integration is particularly visible in lithium-ion batteries as India’s electric vehicle and energy-storage ecosystems expand. Lithium-ion batteries crossed the 80 per cent threshold for imports from China in 2025–26. India’s imports of lithium-ion batteries from China have more than doubled since 2021–22, reaching $3.9 billion in 2025–26, with China accounting for 83.6 per cent of India’s total imports, the report said.The battery example also illustrates the opportunity this integration presents. As India seeks to build manufacturing capabilities in sectors such as electric mobility and energy storage, access to established global supply chains can support the expansion of domestic production. The policy challenge is therefore to use existing integration to deepen capabilities and increase the share of value created in India, it revealed.“The evidence shows that integration in electronics is not only deep, but expanding across a wider set of products over time. Crucially, it is concentrated in upstream and component-level manufacturing, where domestic capabilities remain uneven. Our findings point clearly to the fact that policy should focus not on broad-based shifts in trade exposure, but targeted localisation and accelerated value addition in specific high-impact segments,” Santosh Pai, Member of the Governing Council, ICS, said.Semiconductor importsThe report also added that China remained the dominant source of India’s semiconductor (HS 8541) imports in 2025–26, accounting for 48.9 per cent of total imports, well ahead of Singapore (8.4 per cent), Indonesia (7.5 per cent), and Vietnam (6.6 per cent), despite its share declining from around 64 per cent in 2024–25.Published on September 9, 2026
