The trade deficit with China has been around $20-25B range usually. Its only this year that the deficit ballooned to close $40B.
The best way is to keep an eagle eye out for any product dumping and apply anti-dumping duties. Maybe have a taskforce for Chinese products in particular. Make sure that Chinese products adhered to safety standards as well and when it comes to major machinery like Power station equipment and Telecom equiment, have provisions to localise manufacturing and create JVs so that the deficit also means jobs and local knowledge is also created.
Remember that as part of WTO, you can't have laws to just ban exports from a country or hike tariffs as it would be in violation of WTO agreements.
Also I disagree that India does not get any benefit. The reality is that we are getting these products cheaper from China and if these products were not there, then we would have to pay more for the same products or go without the benefit of having these products.