Bilateral Updates

India and the US are moving towards closing all the open ends of the interim trade agreement, and both sides are likely to execute the "very, very vibrant" first phase of the pact by the middle of next month, Commerce and Industry Minister Piyush Goyal said on Friday. He said that the US team was in New Delhi from June 2-4 for finalisation of the deal. They held discussions with the Indian team.

India is seeking to diversify its sourcing network for new-age manufacturing for which it has set ambitious targets. But China’s grip over India’s clean-energy and advanced manufacturing supply chain is only getting stronger. The northern neighbour controls more than 84% of India’s lithium-ion battery imports, 78% of permanent magnet supplies and over half of lithium carbonate imports.

China has agreed to ramp up trade for U.S. agricultural products such as beef and poultry, buying at an annualised rate of $17 billion per year for 2026 and at that level for 2027 and 2028, the White House announced on Sunday (May 17, 2026).

US President Donald Trump arrived in China on Wednesday for a three-day state visit during which he will discuss a host of global issues, including the Iran war, with Chinese President Xi Jinping. Trump, who is visiting China at the invitation of President Xi, was received by Chinese Vice President Han Zheng at the airport.

China has requested the WTO's dispute settlement body to set up a panel in a case it has filed against India over New Delhi's support measures for the solar cells, modules and information technology sectors. The request follows failure of bilateral consultations on reaching a mutually agreed solution on the dispute filled by China in December last year. The consultations were held on February 10, 2026 with a view to reaching a mutually agreed solution.

China's exports rose 14.1 per cent in April from a year earlier, the government said Saturday, despite the Iran war and lingering impacts from higher US tariffs. The data were released just days ahead of a planned meeting next week between US President Donald Trump and Chinese leader Xi Jinping in Beijing. That beat analysts' estimates and was a significant improvement from March's 2.5 per cent year-on-year expansion.

India is following a diversified strategy to boost exports to China by strengthening domestic capacities while reducing import dependence through diversification of its supplier base, as complete decoupling from Beijing is difficult since Chinese inputs support the country's industrial growth, a senior official said. "While India may not have hard decoupling from China, it is creating its own capacity both in terms of having resilient supply chain and also in terms of increasing our own exports capacity," the official said.

India and China held their first bilateral consultations on the Shanghai Cooperation Organisation (SCO) in New Delhi on April 16-17, agreeing to strengthen cooperation on security, trade and regional connectivity. The two sides exchanged views on implementing SCO leaders' decisions and the future course of the organisation. They agreed to continue and deepen consultations on SCO-related issues, officials said.

China has overtaken the US to emerge as India's largest trading partner in 2025-26, with bilateral trade reaching USD 151.1 billion, while the country's trade deficit with Beijing widened to USD 112.16 billion during the period, government data showed. The US was India's largest trading partner for four consecutive years till 2024-25.

China's exports grew 2.5 per cent in March from a year ago, significantly slowing from the previous two months as uncertainties rose from the Iran war and its impact on energy prices and global demand. The March export data released by China's customs agency Tuesday missed analysts' estimates and was sharply down from the 21.8 per cent export growth recorded for January and February. Imports last month surged 27.8 per cent, up from the 19.8 per cent year-on-year increase in the first two months of this year.

Asia's biggest liquefied petroleum gas LPG importers, including India and China, are racing to replace disrupted West Asia supplies with cargoes from the Americas, driving spot premiums to record highs, analysts and traders said. LPG exports from the West Asia, Asia's top supplier of the fuel used for cooking and feedstock for petrochemical plants, have plunged since the US-Israeli war with Iran started in late February.