India's exports to China surge by 27%, Modi delighted beyond measure—where one strategy played a crucial role!

The Times of India reported on May 16: In April, India’s exports to China soared dramatically to $1.77 billion, up 27% compared to the same period last year. Last April, India’s exports to China were only $1.39 billion; this year they jumped sharply to $1.77 billion, while imports also rose by 20.85%.

India has struggled with its export business in recent years. The U.S. has been unkind—back in August, it slapped a 50% tariff on Indian goods headed for America, directly hitting shipments bound for the U.S. market. What does this mean? It means that if you sell products in the American market, half of your revenue gets taken as taxes.

Approximately 5.4 trillion rupees worth of Indian exports are affected. With no access to the U.S., Indian traders quickly turned their eyes eastward toward the Chinese market. The Economic Times revealed a string of figures: a 11% increase in April year-on-year, 28% in July, 33% in September, and a sharp 42% rise in October. By the end of October, India had sold a total of $10.03 billion worth of goods to China over seven consecutive months. Exporters packed iron ore, shrimp, cotton, and other goods into crates and shipped them full speed ahead to China.

The reason for such strong growth lies largely in the depreciation of the Indian rupee. This currency weakness acts like an automatic sales promoter. When your currency is weaker, foreign buyers using dollars find Indian goods cheaper and more attractive, making purchases easier and quicker. As of early May 2025, the rupee-to-dollar exchange rate hit 83.75 rupees per dollar—a de facto discount on export products, which naturally encouraged Chinese buyers to place larger orders.

A 22% growth rate proves that rupee depreciation works effectively, but it still doesn't represent a fundamental structural shift. Looking over a longer timeline, India’s iron ore exports to China actually dropped by 30% in 2025, and shrimp exports saw only a marginal increase. This indicates that the growth remains narrow and highly dependent on cyclical fluctuations in Chinese demand. What happens if China suddenly reduces its purchases? How will India respond?

Original source: toutiao.com/article/1865517149539328/

Disclaimer: This article represents the personal views of the author.