US alleges India helps ‘China’s shadow trans-shipment network’ to evade tariffs; names Pune, Chennai, Gujarat as hubs
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The US has alleged that India is allowing Chinese goods to be rerouted to America to avoid tariffs. Washington made this allegation in a report titled “The Great Transshipment Scam”, released by the White House on Thursday. The report mentions some of India’s major cities and regions—Pune, Chennai, and Gujarat—as the top areas “enabling” China to evade US tariffs.
These allegations by the White House are critical as they come at a time when the Trump administration has already imposed 10% tariffs on imports from India allegedly made using forced child labour. Washington has also threatened to impose up to 100% tariffs on India and other countries for buying Russian oil.
What does the report claim?
In 2018, the White House imposed multiple tariffs on Chinese imports, ranging from 7.5% to 100%, on goods under Section 301 of the Trade Act of 1974 for alleged unfair trade and tech practices. On July 24, 2026, the US also announced additional 12.5% tariffs on China for alleged forced-labour compliance gaps.
“Following the imposition of Section 301 tariffs in 2018, the direct US trade deficit with China fell in 2019 and 2020,” the report said.
Following this, the US alleged that several countries—which faced tariffs in the US—started routing their goods to America from other nations to evade duties, and “China provides the most developed historical example of this conduct”.
“Products that previously moved directly from China to the US were shipped through jurisdictions where limited assembly, finishing, repackaging, relabelling, or documentation changes could create the appearance of a different national origin,” the report claimed.
Notably, the findings also alleged that this practice by China created “a global network of production hubs” to evade US tariffs. “Over time, these practices contributed to the development of a global network of production hubs, logistics platforms, free-trade zones, bonded warehouses, processing corridors, and re-export centres,” it said.
What are the alleged findings against India?
The report alleged that several top trading partners of the US comprise “China’s Shadow Transshipment Network”, including India.
“The countries that comprise China’s Shadow Transshipment Network include many of America’s largest trading partners. China’s biggest enablers range from Mexico and Canada on U.S. land borders to the European Union, India, Japan, and South Korea,” it mentioned.
The White House also claimed that many Southeast Asian countries allegedly play an important role in the network.
“Given their proximity to China, it is hardly surprising that many Southeast Asian countries play an important role in the network, from Cambodia, Indonesia, and Malaysia to Thailand and Vietnam. More surprising is the sheer number of smaller countries scattered across the globe that also enable the Great Transshipment Scam,” it added.
The report further said that the amount of trade carried through the trans-shipment network is valued at approximately $40 billion to $303 billion annually.
US named India as one of the top trans-shipment hubs
The findings also named India as one of the top hubs allegedly contributing to that network and exporting goods worth billions of dollars.
“On that strict standard, OTEA estimates that approximately $67 billion in US-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,” the report said.