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Telecom and electronics imports from China now account for 57.2 per cent, while machinery and hardware make up 44 per cent. Chemicals and pharmaceuticals follow closely at 28.3 per cent.
India’s exports to China decline sharply to 11.2% of bilateral trade
The think tank pointed out that in antibiotics like erythromycin, China supplies 97.7 per cent of India’s requirements. In electronics, it controls 96.8 per cent of silicon wafers and 86 per cent of flat panel displays. Solar cells and lithium-ion batteries from China make up 82.7 per cent and 75.2 per cent of India’s imports in the renewable energy sector. Everyday products such as laptops, embroidery machinery, and viscose yarn are also largely sourced from China.The think tank noted that India’s exports to China have declined sharply, reducing India’s share in bilateral trade to just 11.2 per cent today from 42.3 per cent two decades ago. Such structural dependence, GTRI warned, exposes India to serious geopolitical risks and highlights the urgent need for domestic production capacity and resilient supply chains.
India ramps up efforts for domestic rare earth production
After China had earlier imposed a curb on rare earth magnets in April 2025, India has been looking for domestic production of rare earth. IREL, a government-owned entity, is at the forefront of India’s rare earth strategy. The company is actively pursuing international partnerships to establish domestic rare earth magnet production capabilities.
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Recently on Tuesday, Madhya Pradesh Chief Minister Mohan Yadav also announced the discovery of “huge” reserves of rare earth elements (REEs) in the Singrauli district, saying it will reduce India’s dependence on China and position the state as a hub for critical minerals.
Rs 18,100 crore investment to boost domestic cell production
To reduce reliance on other countries, the Government of India had also approved the Production Linked Incentive (PLI) scheme with an outlay of Rs 18,100 crore to strengthen domestic cell production and lower the overall cost of cell manufacturing.
The scheme aims to create a total ACC capacity of 50 GWh over a period of five years, following a two-year gestation period.
Hyundai, Ola, Rajesh Exports, Reliance take the lead
Focus will be on Hyundai Global Motors, Ola Electric Mobility, Rajesh Exports, and Reliance New Energy Solar. 40 GWh , out of the total 50 GWh ACC capacity, has already been awarded in two rounds to these four beneficiary firms. This capacity is end-use agnostic, meaning it can be used for various applications such as e-vehicles, stationary energy storage systems, consumer electronics, rail, defence, and more.
The initiative is expected to attract approximately Rs 45,000 crore in direct investments and reduce India’s oil import bill by Rs 2,00,000 crore during the program’s duration.
The remaining 10 GWh has been specifically earmarked for Grid Scale Stationary Storage (GSSS) applications, focusing on large-scale energy storage for the power sector.
India should focus on deep-tech and reverse engineering: GTRI
The GTRI report suggested that India must focus on building domestic strength through deep manufacturing and reducing reliance on Chinese imports. The think tank also said that steps such as reverse engineering for rapid substitution and developing deep-tech manufacturing, aiming to bring down the trade deficit with China from $100 billion to $50 billion within five years.