Along with diversifying export destinations and import sources, India should focus on reducing critical single-country dependencies and strengthening domestic value addition to build greater trade and production resilience, EY India said in a report. India’s merchandise trade imbalance is large and diverse. Its largest surplus is with the US and largest deficit with China. The US accounted for 33.8% of India’s merchandise trade surplus with surplus countries in 2025, while China accounted for 24.6% of its merchandise trade deficit with deficit countries.