New Delhi: A fresh trade controversy has emerged between India and the United States after a White House report accused India of being part of a global “shadow transshipment network” that allegedly helped Chinese goods bypass higher US tariffs by routing shipments through third countries.
The report, titled “The Great Transshipment Scam,” claims that Chinese exporters used multiple trade routes to avoid additional duties imposed by Washington and enter the American market at lower tariff rates.
White House Flags India Among Key Transit Hubs
According to the report prepared by US President Donald Trump's adviser Peter Navarro, India has been listed among countries that played a significant role in facilitating the movement of Chinese-origin goods into the US.
The document estimates that potentially illegal transshipment activities involved goods worth nearly $60 billion, resulting in substantial losses in US tariff revenue.
The report categorises around 40 countries involved in such trade routes and places India, along with major economies including Canada, Japan, the European Union, Israel and Mexico, in the highest category of countries allegedly enabling large-scale transshipment.
Trump Administration Demands Tough Action
The White House report recommends strict measures against countries accused of helping companies evade US trade laws. Proposed actions include additional penalty tariffs, sanctions, shipment restrictions and possible loss of access to the American market.
The controversy dates back to 2018, when the Trump administration introduced Section 301 tariffs on several Chinese products amid concerns over trade imbalance and unfair competition.
The report alleges that after the tariffs were imposed, Chinese exporters increasingly shifted to alternative routes, using limited processing, packaging changes or documentation adjustments to create the appearance of different origins.
Billions In Trade Revenue At Stake
The report cites US Commerce Department data and claims that around $67 billion worth of goods were transshipped through major hubs, including India, Mexico and Vietnam, in 2025. It estimates that the US suffered billions of dollars in lost tariff revenue due to these practices.
The document also claims that such activities created pressure on American manufacturers, potentially affecting jobs and economic growth. However, the report acknowledges that some figures are based on economic modeling and estimates rather than direct job-loss data.
India-US Trade Ties Face New Challenge
The allegations come at a sensitive time for India-US economic relations, as both countries continue negotiations over a broader trade agreement.
The development follows recent tensions over tariffs linked to India's energy trade with Russia and Washington's broader efforts to counter China's influence in global supply chains.
India has not yet issued a detailed response to the allegations. The latest report could add another layer of complexity to ongoing discussions between New Delhi and Washington over trade, tariffs and supply chain security.