China transhipped using India, 40 countries to avoid tariffs: White House

China has built a vast transshipment network using more than 40 countries and trade zones, including India, to evade US tariffs, the White House has claimed. The allegation was made in a report titled 'The Great Transshipment Scam' published by the US administration's Office of Trade and Manufacturing Policy.

According to the report, many of the US's key trading partners are part of China's alleged 'shadow transshipment network', from Mexico and Canada to the European Union, India, Japan and South Korea. Through these countries, Chinese goods are entering the US market, avoiding tariffs.

The report identified India's Pune, Gujarat and Chennai-based manufacturing hubs as potential corridors for sending China-linked pumps and compressors to the US. Based on US trade and economic data, the report claimed that nearly $67 billion worth of goods re-exported from China through various hubs like Mexico, India and Vietnam entered the US in 2025, costing the US government approximately $28 billion in tariff revenue.

However, India's trade statistics with the US raise questions about the alleged re-export picture. The report stated that India exported approximately $750 million worth of pumps and compressors to the US in fiscal 2025-26, while India imported approximately $2 billion worth of these goods from China during the same period. The Indian government has said it is examining the report's data and methodology. Foreign Ministry spokesperson Randhir Jaiswal said India has strong laws and systems to determine product origin, customs and export controls, and action will be taken if any irregularities are proven.

The US report said sending goods through a third country for minor processing, repackaging, relabelling or altering documents to conceal the product's true origin is a method of illegal transshipment. The report also claimed that since 2018, in response to US tariff policies, China has encouraged a global network to send goods through various countries instead of direct exports, with over 40 economies divided into three tiers, placing India in the first tier with Canada, the EU, Japan, Mexico, South Korea and Taiwan.

However, Indian trade analysts have expressed doubts about Washington's assessment. Ajay Srivastava, founder of the New Delhi-based Global Trade Research Initiative, said the report's definition of transshipment is overly broad, risking conflating legitimate production and global supply chain activities with origin fraud. The report also proposed a new AI-driven 'Detective Border' system to identify irregular trade routes and suspicious shipments, which analysts warn could increase inspections, delays and penalties for Indian exporters.