White House report names India among top enablers of Chinese tariff evasion, citing $67 billion in transshipped goods and $28 billion in lost revenue. India's manufacturing reliance on Chinese inputs faces risk of further U.S. tariffs.
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The White House last week accused India of being among the top enablers of Chinese tariff evasion, detailing an estimated $67 billion in transshipped goods and $28 billion in lost U.S. revenue. The report, titled “The Great Transhipment Scam,” named Mexico, Vietnam, and India as the primary hubs through which Chinese exports were rerouted to bypass tariffs imposed since 2018.
India’s role centers on the Pune-Gujarat-Chennai production belt, where pumps and compressors from China are absorbed before being re-exported to the U.S., the report said. The White House identified more than 40 countries at “elevated illegal transhipment risk,” with India among the top offenders alongside Mexico, Canada, the European Union, Japan, and South Korea.
The accusations are the latest in a series of U.S. trade actions against India. The Trump administration has already imposed a 10% tariff on Indian imports over forced-labour compliance gaps, a 50% penalty on Indian goods for financing Russia’s war in Ukraine through oil purchases, and a Senate-backed bill that would levy tariffs of up to 100% on India for those same oil imports. That bill awaits a House vote.
The report’s findings underscore the failure of U.S. tariff policy to boost domestic production, according to the data it cites. U.S. imports from China fell from $525.8 billion in 2017 to $327.5 billion in 2025. But total U.S. imports from all countries rose from $2.41 trillion to $3.50 trillion over the same period. “Mr. Trump’s tariffs changed the source of imports but failed to reduce America’s overall dependence on imported goods,” said Ajay Srivastava, founder of the Global Trade Research Initiative.
For India, any additional penal action would hit its manufacturing strategy. The “Make in India, For the World” push relies heavily on Chinese inputs: electronic components from China made up nearly 13% of India’s imports from China in the first quarter of 2026-27, up from 3.3% in 2015-16. The share of finished goods such as telecom instruments and fertilizers has fallen sharply over the same period. India imports raw materials and intermediates, processes them, and exports finished goods. If forced to curb Chinese imports, manufacturing costs would rise, making Indian products less competitive globally.
The White House report did not announce immediate penal actions against India. But the possibility remains. Trump could decide to impose further tariffs on countries he deems complicit in transshipment. The Senate bill on Russian oil tariffs is still pending in the House, and a separate U.S. investigation into India’s excess capacity could lead to higher duties.
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