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Nuvama flags rising risk of Chinese imports undercutting Make in India
Our read
Cheaper China-origin goods will intensify value-segment retail competition in India, benefiting scaled retailers and consumers near term while pressuring domestic manufacturers until targeted trade barriers and production support catch up.
For operators
Cheaper Chinese imports may improve retail price competitiveness and margins, but operators should diversify sourcing and protect domestic supplier relationships as import pressure rises.
Watch
Monthly Indian import growth from China in consumer-goods and intermediate-goods HS codes.
The report,
Nuvama warns that Chinese exports displaced by US tariffs could increasingly flow into India, benefiting consumers through cheaper goods but pressuring domestic manufacturers. It calls for larger production incentives, public investment and more productive corporate credit to build Indian manufacturing scale.
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Reported figures
From the report. Source details below
| China's estimated 2025 current account surplus: | about $700 billion |
|---|---|
| India's 12-month goods trade deficit through June 2026: | about $351 billion |
| Chinese exports to India in FY26: | about $132 billion |
| India's exports to China in FY26: | about $19 billion |
| India's bilateral goods deficit with China in FY26: | roughly $113 billion |
Also in the report
- China accounted for about 28% of global manufacturing in 2024 and 13% of global consumption
- Average PLI spending estimated at about Rs 115 billion in FY25-FY26
Why it matters to operators and investors
Prioritize partnerships, acquisitions or supply-chain investments that build local manufacturing scale and differentiated products less vulnerable to low-cost Chinese imports.
The counter-case
The case against this reading — not reported by the source.
The thesis may overstate how easily China can redirect tariff-displaced exports into India. India already uses tariffs, quality-control orders, import licensing and anti-dumping measures across many sensitive categories, while Chinese suppliers may face compliance, distribution and political-risk barriers. Lower-priced imports can also reduce input costs for Indian assemblers and consumers, potentially improving downstream competitiveness rather than simply displacing domestic production. A large bilateral deficit is not proof of imminent import surges; much of it reflects capital goods, electronics components, chemicals and solar inputs that domestic industry still requires.
The source
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