Washington: A new White House report has identified India as one of several countries allegedly involved in a global “shadow transshipment network” that allows Chinese goods facing high US tariffs to enter the American market through third countries.
The report, titled “The Great Transshipment Scam,” estimates that potentially illegal transshipment could be worth around $60 billion and has resulted in billions of dollars in lost US tariff revenue. It calls for stronger action against countries that facilitate tariff evasion, including penalties, sanctions and possible restrictions on market access.
According to the report, the issue intensified after the Trump administration introduced Section 301 tariffs on selected Chinese goods in 2018. Chinese exporters allegedly began routing products through third countries, where goods could undergo limited assembly, repackaging, relabeling or documentation changes before being shipped to the US.
The report identifies around 40 countries as part of the network and divides them into three tiers based on their alleged role in facilitating the movement of Chinese-origin goods. India, along with countries including Canada, Japan, Mexico, Israel and members of the European Union, has been placed in Tier 1.
The report cites an estimate based on US Commerce Department data that around $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 may have resulted in approximately $28 billion in lost US tariff revenue.
The White House report also claims that the influx of Chinese goods through third countries has increased pressure on US manufacturers. A model-based estimate suggests that annual illegal transshipment worth $75 billion could be associated with around 450,000 displaced jobs, a $113 billion to $150 billion reduction in annual US GDP and $19 billion to $26 billion in lost federal revenue.
The report specifically points to the Pune-Gujarat-Chennai corridor in India, alleging that it has benefited from Chinese transshipment involving products such as electric pumps and compressors, while US manufacturers in cities including Cincinnati, Dayton and Columbus have faced greater competition.
The report comes at a sensitive time for India-US trade relations, as both countries continue negotiations on a trade agreement. It also follows US legislative efforts to impose higher tariffs on countries purchasing Russian energy, with India among the economies specifically mentioned by the bill’s sponsors.
The allegations in the report could add further pressure to ongoing trade discussions between New Delhi and Washington, particularly over tariff enforcement and the origin of goods entering the US market.
