- The White House report estimates that the US received around $67 billion worth of transshipped goods from China through hubs including India in 2025, resulting in a $28 billion loss in tariff revenue.
- India's Ministry of External Affairs Spokesperson Randhir Jaiswal stated that India would study the findings and methodology, emphasizing the country's robust laws and procedures governing Customs.
- The report comes amid heightened India-US trade tensions, including a US Senate bill that could impose punitive tariffs up to 100% on India over Russian oil purchases.
- Think-tank GTRI criticized the report for stretching the technical meaning of transshipment and warned that the proposed AI-enabled 'Detective Border' could lead to more inspections and delays.
- Indian exporters fear that the report may lead to non-tariff barriers on top of existing 10% tariffs under Section 301 of the US Trade Act of 1974.
- The report specifically targets India's Pune-Gujarat-Chennai corridor for pumps and compressors, but GTRI data shows India's large global exports weaken any presumption that its US shipments are simply Chinese goods being rerouted.
The White House report categorizes India as a Tier-1 country in a transshipment network facilitating Chinese goods' entry into the U.S., estimating a $28 billion loss in tariff revenue due to $67 billion in goods transshipped through India in 2025.1
The report highlights India's Pune-Gujarat-Chennai corridor as a significant route for Chinese pumps and compressors, with Indian exports to the U.S. reaching $750 million in FY26, while imports from China were nearly $2 billion.
India's Ministry of External Affairs expressed intentions to review the report, emphasizing their adherence to customs laws. Spokesperson Randhir Jaiswal stated, 'We would like to study the findings and the methodology adopted in detail.'2
The report's timing is critical, coinciding with U.S. Senate actions that could impose punitive tariffs on India for Russian oil purchases. Indian exporters fear increased scrutiny and non-tariff barriers, as they already face a 10 percent tariff under Section 301 of the U.S. Trade Act.6
Experts warn that India's classification in the highest risk tier may lead to stricter trade agreements, with potential repercussions for legitimate manufacturing practices.
Ajay Srivastava from the Global Trade Research Initiative cautioned that the report risks conflating legitimate trade with transshipment, stating, 'It thereby mixes origin fraud with legitimate manufacturing.'
The report suggests that the U.S. may push for clauses in trade agreements to address transshipment issues, indicating a shift in focus from China to countries like India.
Shantanu Singh and Vikram Naik, trade lawyers, noted that India's tier-1 status could lead to increased scrutiny of imports, stating, 'It cements the idea that the US will seek a clause in the upcoming trade deal that commits India to take action on transshipment.'
“The report estimates $67 billion in transshipped goods via Mexico, India, and Vietnam in 2025, causing a $28 billion tariff revenue loss. GTRI warns the AI-enabled 'Detective Border' could trigger more inspections and retrospective duties, while India's MEA spokesperson Randhir Jaiswal cites robust customs laws.”
The Indian Express
