- India's trade deficit with China crossed the USD 100 billion mark in 2026, highlighting an asymmetrical trade relationship. - The widening deficit is driven by heavy dependence on Chinese imports for critical sectors, including electronics, active pharmaceutical ingredients (APIs), and heavy machinery. - Despite various policy measures like Production-Linked Incentive (PLI) schemes and import restrictions, structural supply-chain dependencies on China persist. - **Trade Deficit:** The economic measure of when a country's total imports of goods and services exceed its total exports over a given period, representing a negative balance of trade. - **Structural Vulnerabilities:** Deep-rooted economic imbalances where a country is permanently dependent on foreign imports for critical value-added industrial inputs, components, and raw materials due to domestic manufacturing gaps. **Introduction** India's trade deficit with China crossed USD 100 billion in 2026, underscoring deep-seated structural vulnerabilities and heavy import reliance on Chinese goods despite diplomatic and economic counter-measures. **Core Issue and Detailed Points** - India's trade deficit with China crossed the USD 100 billion mark in 2026, highlighting an asymmetrical trade relationship. - The widening deficit is driven by heavy dependence on Chinese imports for critical sectors, including electronics, active pharmaceutical ingredients (APIs), and heavy machinery. - Despite various policy measures like Production-Linked Incentive (PLI) schemes and import restrictions, structural supply-chain dependencies on China persist. **Key Statutory Bodies, Acts & Concepts** - **Trade Deficit:** The economic measure of when a country's total imports of goods and services exceed its total exports over a given period, representing a negative balance of trade. - **Structural Vulnerabilities:** Deep-rooted economic imbalances where a country is permanently dependent on foreign imports for critical value-added industrial inputs, components, and raw materials due to domestic manufacturing gaps.