India has been named as a major hub in what a new White House report calls a “shadow transhipment network” used to move Chinese goods into the US while avoiding higher tariffs.
The report, titled “The Great Transhipment Scam”, alleges that Chinese exporters have increasingly routed goods through third countries. The aim, according to the report, was to reduce the tariff burden on products entering the American market.
US President Donald Trump’s adviser Peter Navarro estimates that potentially illegal transhipment could be worth around $60 billion. The report says the practice has also resulted in billions of dollars in lost US tariff revenue.
What Is a Shadow Transhipment Network?
A shadow transhipment network is a system in which goods are moved through third countries before reaching their final market, often to avoid higher tariffs or trade restrictions. In this case, the US report alleges that Chinese goods were routed through countries such as India, Mexico and Vietnam. The goods could be repackaged, relabelled or undergo limited processing to make them appear to have a different country of origin. This can help exporters reduce the tariffs imposed on Chinese products.
How Did the Shadow Network Begin?
The White House report traces the network back to 2018. That was when the Trump administration imposed Section 301 tariffs on several Chinese products. According to the report, Chinese exporters then began looking for alternative routes into the US market.
“After their imposition, Chinese exporters increasingly routed goods through third countries,” the report says.
These goods could undergo limited assembly, finishing or repackaging in another country. Changes to labels or documents could also make the products appear to have a different country of origin. This, the report argues, allowed Chinese-origin goods to reach the US while facing lower tariffs.
Why Is India Listed as a Key Hub?
The report identifies around 40 countries that it says play different roles in the transhipment network. These countries have been divided into three tiers based on their alleged role in moving Chinese-origin goods into the US.
India has been placed in Tier 1, alongside major US trading partners including Canada, Japan, the European Union, Israel and Mexico. The classification does not by itself establish that India or its government illegally facilitated tariff evasion. Rather, the report identifies India as one of the important routes through which such goods allegedly moved.
$67 Billion in Goods Routed Through Key Hubs
The report cites US Commerce Department data to estimate that around $67 billion worth of US-bound goods were transshipped from China through three major hubs in 2025.
Those hubs were Mexico, India and Vietnam. The report estimates that this movement resulted in around $28 billion in lost tariff revenue for the US. The figures are part of the report’s broader argument that transhipment has weakened the impact of US tariffs on Chinese goods.
US Claims Economic Damage From Transhipment
The White House report also links the alleged network to wider economic losses in the US. Under a central estimate involving $75 billion in annual illegal transhipment, the report projects that around 450,000 jobs could be displaced.
It also estimates a reduction of between $113 billion and $150 billion in annual US GDP, along with $19 billion to $26 billion in federal revenue losses. The report makes clear that these are model-based estimates, rather than directly observed job losses.
Pune Gujarat Chennai Corridor Under US Lens
The report also points to specific Indian industrial corridors. It says the Pune–Gujarat–Chennai corridor has benefited from the movement of Chinese electric pumps and compressors.
According to the report, such trade has created economic gains for businesses involved in the corridor while putting pressure on US manufacturers in cities including Cincinnati, Dayton and Columbus in Ohio. The claim adds a local dimension to Washington’s wider concerns over Chinese goods reaching the US through third countries.
What Action Does the US Want?
The White House report calls for tougher action against countries that enable tariff evasion. Its recommendations include immediate interdiction, penalty tariffs, sanctions and possible loss of market access.
The report comes at a sensitive time for India-US trade relations. Washington and New Delhi have been negotiating a trade agreement, while the US has also moved towards imposing higher tariffs on countries buying Russian energy.
For India, the report adds another pressure point to an already complicated trade relationship with the US. The key question now is whether Washington’s concerns over the alleged shadow transhipment network will affect the wider India-US trade negotiations.
Sudeep Singh Rawat is a Copy Editor at NewsX Digital with over five years of experience in digital journalism. He covers national and international news, with a focus on politics, crime, technology, public affairs, and trending topics. Before joining NewsX Digital, he worked with Business Standard, The Sunday Guardian, and other digital media organisations. His reporting focuses on breaking news, enterprise stories, and explainers that inform readers through accurate, balanced, and context-driven journalism.
