Washington, D.C.: A new White House report has identified India as part of a global “shadow transhipment network” allegedly used to reroute Chinese goods into the United States and avoid high tariffs imposed on Beijing. The report, titled The Great Transhipment Scam, estimates that potentially illegal transhipment could be worth around $60 billion and has called for stricter action against countries facilitating tariff evasion.
The report, prepared with input from US President Donald Trump’s adviser Peter Navarro, traces the issue to the imposition of Section 301 tariffs on Chinese imports in 2018. It alleges that Chinese exporters subsequently began routing goods through third countries, where limited assembly, repackaging, relabelling or documentation changes could make products appear to originate elsewhere.
India has been placed in Tier 1, alongside major US trading partners including Canada, Japan, Mexico, Israel and the European Union. The classification, however, does not by itself establish that the Indian government or Indian companies were knowingly involved in illegal tariff evasion.
According to the report, approximately $67 billion worth of US-bound goods were transshipped from China through major hubs including Mexico, India and Vietnam in 2025. It estimates that this resulted in around $28 billion in lost US tariff revenue. These figures are model-based estimates and should therefore be viewed with caution rather than as established evidence of wrongdoing by India.
The report comes at a particularly sensitive point in India-US economic relations. Washington has recently intensified pressure on countries purchasing Russian energy, with the US Senate approving legislation authorising tariffs of up to 100% on certain countries, including India. At the same time, New Delhi and Washington have continued efforts towards a broader trade agreement.
The White House report also highlights an alleged India-linked manufacturing corridor spanning Pune, Gujarat and Chennai, claiming that Chinese-origin electric pumps and compressors entering the US market through such routes have affected American manufacturers.
For India, the report presents both a challenge and an opportunity. New Delhi has consistently sought to strengthen domestic manufacturing, diversify supply chains and expand its role as a trusted global production hub. Any US concerns over rules of origin and customs enforcement can therefore be addressed through greater transparency, stronger verification mechanisms and closer bilateral coordination.
Rather than viewing India merely through the lens of US tariff concerns, the issue also underscores India’s growing importance in global trade. As geopolitical tensions reshape supply chains, India’s ability to attract legitimate manufacturing and maintain transparent trade practices could further strengthen its position as an alternative production hub to China.
