US Flags India in China Tariff Evasion Network
The United States has flagged India among more than 40 countries facing elevated risks of being used to reroute Chinese goods and evade higher American tariffs. A White House trade report places India in its top-tier category of major trading hubs where transshipment risks are embedded within large legitimate trade flows.
India Flagged in China Tariff Evasion Report
The report categorises India as a “Tier-1 Diversified Scale Leader” alongside major economies including Canada, Mexico, Japan, South Korea and the European Union.
It alleges that Chinese goods can be routed through third countries, undergo limited processing, repackaging or documentation changes, and then be exported to the United States as products originating from those countries.
The assessment does not establish that the Indian government is deliberately facilitating tariff evasion.
US Flags Pune-Gujarat-Chennai Trade Corridor
The report specifically highlights India’s Pune-Gujarat-Chennai manufacturing corridor in relation to pumps and compressors.
US officials claim Chinese-origin components can enter India, undergo limited processing and subsequently reach the American market as Indian-origin products, potentially attracting lower tariffs than direct Chinese imports.
India, Mexico and Vietnam were identified as major hubs for China-linked transshipment flows in 2025, with the report estimating around $67 billion in goods routed through the three countries.
US Plans AI Crackdown on Transshipment
Washington plans to strengthen customs enforcement using artificial intelligence to analyse shipping records, routing histories and supply-chain information.
The broader report estimates annual illegal transshipment at between $40 billion and $303 billion, depending on the methodology used.
The move could increase scrutiny of Indian exports to the US as both countries continue navigating wider trade and tariff negotiations.
