India’s electronics imports from China show rising supply-chain concentration: study

India’s rising electronics imports from China are increasingly concentrated in components and intermediate goods used across manufacturing, rather than only in finished consumer products, according to a study released by Koan Advisory Group in partnership with the Institute of Chinese Studies (ICS) on Wednesday.

The study found that China accounted for at least 80% of India’s imports across 71 tariff lines at the eight-digit level in 2025-26. Of these, 46 tariff lines crossed the 80% threshold only after 2018-19, indicating that the share of Chinese supplies in these product categories has increased over the period.

India’s overall trade deficit with China stood at $112.1 billion in 2025-26, the country’s largest bilateral trade deficit. Electrical machinery and electronic equipment accounted for $43.1 billion, or about 38%, of the deficit, the study said.

The study examined imports under HS Chapter 85, which covers electrical and electronic equipment, including semiconductor devices, batteries, electrical machinery, cables and switching equipment.

It found that India’s dependence on China is particularly concentrated in several core components used in telecom infrastructure, consumer electronics and industrial machinery.

Lithium-ion batteries were among the products where imports from China recorded a sharp increase. India’s imports of lithium-ion batteries from China more than doubled from 2021-22 to $3.9 billion in 2025-26. China accounted for 83.6% of India’s total lithium-ion battery imports during the year, according to the study.

China was also India’s largest source of semiconductor imports in 2025-26, accounting for 48.9% of total semiconductor imports. Singapore accounted for 8.4%, followed by Indonesia at 7.5% and Vietnam at 6.6%. China's share, however, declined from about 64% in 2024-25, the study said.

The report said the trade deficit under HS Chapter 85 had widened over time and attributed the trend to gaps in India’s domestic manufacturing capacity.

“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 at Koan Advisory Group and one of the report’s authors, said.

Santosh Pai, a member of the governing council at the Institute of Chinese Studies, said the study showed that India-China integration in electronics was concentrated in upstream and component-level manufacturing, where domestic capabilities remain uneven.

The study called for greater localisation of upstream components and higher domestic value addition, rather than focusing only on the assembly of finished electronic products.

The findings come ahead of the 18th BRICS Summit, which India will host in New Delhi on September 12-13. Trade, technology cooperation and supply-chain resilience are among the issues expected to feature prominently at the summit.

The data also comes as India and China move towards greater economic engagement following several years of strained ties after the 2020 border clash. Bilateral trade reached a record $155 billion last year and rose a further 23% in the first seven months of 2026, according to recent reporting.