The recent increase in electric vehicle sales in India has correspondingly led to a significant rise in battery imports from China. According to the latest data from the commerce department, imports of batteries from China have nearly doubled to $2.9 billion during the period from April to August 2026. This makes batteries the sixth largest import item from China for the year. The dominance of Chinese manufacturers in the global battery market is a key factor in this trend.

This surge in battery imports has outpaced other categories such as electronic instruments, electric machinery, plastic raw materials, and residual chemicals. As Indian manufacturers struggle to make technological advancements, the reliance on imported batteries is expected to continue growing. Many local battery producers, having established operations following the Production-Linked Incentive (PLI) scheme, primarily assemble cells sourced from China.

Increase in Vehicle Imports

In addition to batteries, imports of two- and three-wheelers from China have risen dramatically, reaching $107 million during the same April to August period, a sharp increase from just $2 million a year prior. Car imports have also seen a significant rise, increasing 2.6 times to $226 million in the first five months of the financial year 2027, compared to $87 million during the corresponding period last year. This increase is reportedly led by companies such as BYD.

Other imports have also surged, including gold and silver, oil products, dye intermediates, and bulk minerals. However, these categories remain relatively minor compared to the larger imports of electronics, machinery, chemicals, and plastics, which collectively account for approximately three-fourths of all imports from China.

Despite the increase in domestic production of mobile devices and computers, the imports of electronic components and telecom equipment have not decreased. Official statistics indicate that imports in these categories have grown by over 40 per cent in the first five months of the fiscal year, contributing to a widening trade deficit with China. This deficit has increased to nearly $56 billion, up from $44.7 billion during the same period in 2025.

Concerns Over Trade Deficit

The growing trade deficit has raised concerns among Indian officials, including Finance Minister Nirmala Sitharaman and Commerce and Industry Minister Piyush Goyal. Both have recently highlighted the necessity for a “fair deal” in trade relations. While Indian exports have increased by 40 per cent this year, a substantial portion consists of raw materials, with average monthly exports remaining below $2 billion during the April to August timeframe.

Replacing Chinese goods poses a significant challenge for India, primarily due to the cost advantages that Chinese manufacturers enjoy through economies of scale and government subsidies. Experts, including S&P Global Chief Economist Paul Grunwald, have noted that China’s approach to manufacturing differs from that of Japan and South Korea, as it fills the entire spectrum of production without relinquishing lower-end manufacturing.

Industry leaders have expressed concerns that if China were to restrict its exports, various sectors in India, including pharmaceuticals, electronics, machinery, and chemicals, would be severely impacted. Ajay Srivastava, founder of the Global Trade Research Institute, emphasised the need for India to develop domestic capacity and enhance local manufacturing in these critical sectors. This situation has led to frequent petitions from Indian industry stakeholders whenever the government considers implementing import restrictions.

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