2 weeks ago
White House Report Names India in China Shadow Transhipment Network
When countries buy things from each other, they sometimes have to pay extra money called tariffs.
In 2018, the United States put big tariffs on goods coming from China.
The US says China found a way to get around those tariffs by sending its goods through other countries first.
This trick, called transhipment, made the goods look like they came from somewhere else, so the US did not collect the tariff money.
A new report from the White House names more than 40 countries, including India, as part of China's 'shadow transhipment network.'
The report says about $67 billion worth of goods meant for the US moved through Mexico, India, and Vietnam in 2025, costing the US about $28 billion in lost tariff money.
India is placed in the top group of countries that the report links to this practice.
The report even names an Indian factory area, the Pune–Gujarat–Chennai corridor, as a hub for pumps and compressors.
India says it has strong rules against cheating on trade and wants to study the report carefully.
A research group called GTRI says India makes many of these goods itself, so the report may not be fully fair.
The White House's Office of Trade and Manufacturing Policy released a report naming India among more than 40 countries in 'China's shadow transhipment network' allegedly used to evade US tariffs.
India was placed in Tier 1 ('Diversified Scale Leaders') along with Canada, the European Union, Israel, Japan, Mexico, South Korea and Taiwan.
The report estimates about $67 billion in US-bound goods were transshipped from China through Mexico, India and Vietnam in 2025, costing about $28 billion in lost tariff revenue.
India's external affairs ministry spokesperson Randhir Jaiswal said India will study the report's findings and methodology, citing robust laws on customs, rules of origin and exports.
The report also targets India's Pune–Gujarat–Chennai corridor for pumps and compressors, though GTRI data indicates India's large global exports weaken the presumption that US shipments are rerouted Chinese goods.
- Who
- The White House Office of Trade and Manufacturing Policy authored the report; India and more than 40 other countries, including the European Union, Japan and South Korea, were named; Randhir Jaiswal, India's external affairs ministry spokesperson, responded.
- What
- A White House report names India as part of 'China's shadow transhipment network' allegedly used to hide the true origin of Chinese goods and evade US tariffs.
- Where
- The United States (origin of the report); India and other jurisdictions named as transhipment hubs; US-bound goods routed through third countries.
- When
- The report was released on a Friday and India responded at its external affairs ministry's bi-weekly media conference the same day; the exact date is not stated in the articles.
- Why
- Chinese exporters allegedly routed goods through third countries after US Section 301 tariffs were imposed in 2018, costing the US an estimated $28 billion in lost tariff revenue in 2025.
US Administration's View
Indian Government and Trade Experts' View
India's role in the transhipment network
US Administration's View
The report places India in Tier 1, saying illegal transhipment risk is embedded within India's broad legitimate trade flows and large US-bound export platforms.
Indian Government and Trade Experts' View
India said it will study the report's findings and methodology, citing robust laws on customs and rules of origin; lawyers at Khaitan & Co noted the tier-1 tag means India's transhipment-prone imports may already face greater scrutiny, and GTRI argues India's large global exports weaken any presumption that US shipments are simply Chinese goods being rerouted.
The Pune–Gujarat–Chennai corridor claim
US Administration's View
The report says the corridor absorbs Chinese-made pumps and compressors, siphoning manufacturing and supply chains away from the US.
Indian Government and Trade Experts' View
GTRI says India exported liquid pumps worth $1.61 billion globally in FY2026 and air pumps and gas compressors worth $1.48 billion, showing substantial domestic manufacturing capacity that undercuts the transhipment claim.
Purpose and basis of the report
US Administration's View
The report says illegal transhipment breaches the spirit of US trade law and calls for Congressional action to protect US jobs and further the President's trade fairness agenda.
Indian Government and Trade Experts' View
Trade experts such as Abhijit Das call it a pressure tactic that conflates genuine transhipment with exports based on domestic value addition, and say it may pave the way for new tariffs and USTR investigations into transhipment-tackling policies after the Supreme Court struck down reciprocal tariffs.
Key facts
- Report title
- The Great Transhipment Scam: Rise, Scope and Costs (one source cites the subtitle 'Global Evasion and Economic Costs')
- Report length
- 25 pages
- Issuing body
- Office of Trade and Manufacturing Policy, White House
- Countries flagged
- More than 40 with elevated illegal transhipment risk
- India's classification
- Tier 1 - Diversified Scale Leaders
- Tier 1 members
- Canada, European Union, India, Israel, Japan, Mexico, South Korea, Taiwan
- 2025 estimate
- About $67 billion in US-bound goods transshipped from China through Mexico, India and Vietnam, per the Department of Commerce's Office of Trade and Economic Analysis; about $28 billion in lost tariff revenue
- India's response
- Randhir Jaiswal: study findings and methodology; robust laws govern customs, rules of origin and exports
Quotes
Randhir Jaiswal
Spokesperson for India's external affairs ministry
“"India’s categorisation in ‘tier‑1’ transhipment network country is notable and indicative of two things at least. First, it cements the idea that the US will seek a clause in the upcoming trade deal that commits India to take action on transhipment and other practices that help exporters evade US tariffs. Second, it suggests that imports of certain transhipment‑prone goods from India may already be facing greater scrutiny."”
indianexpress.com
“"The report fails to make a distinction between trans‑shipment as normally understood in international trade and exports based on genuine domestic value addition to imported inputs. India must question the basis and conclusions of the report."”
indianexpress.com
Mandated Report
Mandated White House report
“"On that strict standard, the Department of Commerce’s Office of Trade and Economic Analysis (OTEA) estimates that approximately $67 billion in U.S.-bound goods were transshipped from China through the top hubs—Mexico, India, and Vietnam—in 2025, producing an estimated $28 billion in lost tariff revenue."”
indianexpress.com
White House Office of Trade and Manufacturing Policy
U.S. White House office
“Tier 1 includes Canada, the European Union, India, Israel, Japan, Mexico, South Korea, and Taiwan.”
telegraphindia.com
Sources
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