New Shanghai–Gujarat Shipping Link Highlights India’s Expanding Trade — and Growing Imbalance with China

• Maersk launches weekly China–India F12 service starting June 4, 2026.

• India’s FY26 imports from China: ~$1.33 trillion; exports: ~$197 billion.

• Trade deficit widens to about $1.14 trillion.

• 66% of imports concentrated in electronics, machinery, computers, chemicals.

• Supply chains remain deeply dependent on Chinese inputs.

  
  

A major global shipping operator has introduced a new dedicated sea corridor between China and India, underscoring both the expansion of bilateral trade and the widening imbalance that defines it.

Denmark-based Maersk, the world’s largest container shipping company after MSC, has unveiled a weekly Far East–India service at a time when India’s imports from China are surging to record levels — nearly seven times the value of its exports.

Why the New Service Now?

The launch reflects growing cargo demand along the China–India trade lane. Despite ongoing geopolitical tensions, commercial exchanges between Asia’s two largest economies continue to intensify, creating pressure for additional shipping capacity.

The announcement, made on May 28 and highlighted by the Chinese Embassy in India, signals a clear commercial calculation: trade volumes justify expanded logistics infrastructure.

Maersk’s engagement with India has also deepened in recent years. In 2024, CEO Keith Svendsen met Prime Minister Narendra Modi and praised India’s long-term development vision. Earlier interactions with senior Indian leaders, including External Affairs Minister S. Jaishankar and Uttar Pradesh Chief Minister Yogi Adityanath, indicate the company’s broader interest in India’s logistics and supply chain ecosystem.

According to Maersk South Asia Managing Director Thomas Theeuwes, customers are seeking greater capacity, improved reliability and stronger multimodal connectivity between the two markets — factors that drove the introduction of the new route.

Inside the F12 Route

The new service, named F12, will begin its maiden voyage from Shanghai on June 4, 2026. It will operate weekly using six mid-sized container vessels, each with a capacity of 4,500 TEUs — equivalent to roughly 2,250 standard 40-foot containers.

The route will connect Shanghai, Ningbo and Nansha in China with Tanjung Pelepas in Malaysia, Nhava Sheva in Mumbai, Pipavav in Gujarat and Port Qasim in Pakistan.

Pipavav’s inclusion is particularly strategic. The port links directly to India’s Dedicated Freight Corridor rail network, enabling faster cargo movement to the National Capital Region and key industrial hubs. This integration could shorten transit times and support growing e-commerce and manufacturing clusters across northern India.

The F12 will operate alongside Maersk’s existing FI3 service, offering businesses more frequent sailings and logistical flexibility.

The Numbers Behind the Imbalance

India’s trade figures reveal why expanded shipping capacity is needed. In FY26, imports from China rose 16% year-on-year to approximately ₹12.64 lakh crore — about ₹12.64 trillion, which converts to roughly $1.33 trillion at an exchange rate of 1 USD = 95 rupees.

Exports to China grew faster in percentage terms — up 36.66% — reaching ₹1.87 lakh crore, or about $197 billion. However, the gap between imports and exports widened further, pushing the trade deficit to roughly ₹10.81 lakh crore, equivalent to about $1.14 trillion.

China remained India’s largest trading partner during the fiscal year.

Nearly two-thirds of India’s imports from China — worth about ₹7.93 lakh crore (approximately $835 billion) — fall into four categories: electronics, machinery, computers and organic chemicals. China supplies 43% of India’s electronics imports, 40% of machinery and computer imports, and 44% of organic chemical imports.

These goods are not discretionary purchases. They serve as essential inputs for Indian industries producing everything from smartphones and solar panels to pharmaceuticals and electric vehicles.

Critical Dependence in Key Sectors

The pharmaceutical sector illustrates the depth of reliance. Parliamentary data show India depends on China for more than 70% of several critical active pharmaceutical ingredients (APIs), with some medicines exceeding 90% dependence.

Similarly, in FY25, India imported auto components worth ₹68,877.4 crore — approximately $72.5 billion — of which ₹18,363.1 crore (around $19.3 billion) came from China, accounting for roughly 27%.

These figures reveal how intertwined supply chains have become, even as policymakers emphasize diversification and domestic manufacturing.

Why the Gap Persists

Although exports have grown in recent years, they remain below FY2021 levels. Over the past five years, imports from China have more than doubled to roughly ₹12.63 lakh crore (about $1.33 trillion), while exports stand at about ₹1.87 lakh crore (around $197 billion).

As a result, the trade deficit has expanded by 155% during this period.

Analysts argue that the imbalance predates the 2020 Galwan Valley clash, which intensified scrutiny of Chinese investments and led to app bans and tighter regulatory oversight. While these measures curtailed certain aspects of China’s economic footprint, they did not fundamentally alter trade flows.

India faces persistent barriers in accessing Chinese markets. Sectors where India is competitive — such as generic pharmaceuticals, specialty chemicals and engineering goods — often encounter regulatory complexities and limited distribution channels in China.

At the same time, India’s manufacturing ecosystem continues to depend heavily on Chinese intermediate goods that are difficult to substitute quickly.

What the New Corridor Signals

The F12 route will streamline cargo flows, enhance frequency and improve reliability. But it also highlights a deeper structural reality: India’s manufacturing growth remains closely tied to Chinese supply chains.

For every dollar India exports to China, it imports roughly seven dollars’ worth of goods in return. The new shipping corridor is both a facilitator of economic growth and a reminder of that imbalance.

In the near term, faster and more efficient logistics will support Indian industries reliant on imported components. In the long term, however, the challenge remains unchanged — expanding India’s export footprint in China while reducing excessive dependence on critical imports.

Until that shift occurs, maritime links like Shanghai–Gujarat will continue to carry far more cargo east-to-west than the other way around.