White House Report Accuses India of Enabling China's Tariff Evasion
A White House report has identified India as a key enabler of China's evasion of U.S. tariffs. The report details how goods are routed through regions like the Pune-Gujarat-Chennai belt to circumvent existing duties.
Key takeaways
- A White House report has identified India as a major enabler of China's tariff evasion tactics.
- Chinese goods are allegedly being transshipped through India's Pune-Gujarat-Chennai belt to bypass U.S. tariffs.
- The report estimates $67 billion in goods were transshipped from China through hubs like India in 2025, costing $28 billion in lost U.S. tariff revenue.
- This accusation comes as India faces separate U.S. actions regarding forced labor and Russian oil imports.
India has been identified in a new White House report as a significant country enabling China to evade United States tariffs. The report, titled ‘The Great Transhipment Scam,’ alleges that Chinese goods are being rerouted through India and other nations to circumvent U.S. duties imposed on Chinese products.
The U.S. has previously imposed tariffs on goods from China, starting in 2018 under Section 301 of the Trade Act of 1974 due to unfair trade and technology practices. Additional tariffs were added in July 2026 for issues related to forced labor. According to the White House report, Chinese exporters began routing their goods through third countries after these tariffs were put in place. This practice involves minimal assembly, finishing, repackaging, relabeling, or documentation changes to create the appearance of a different country of origin.
The report categorizes over 40 countries as having an “elevated illegal transshipment risk,” placing India among the primary enablers of this tariff evasion. India is included in the report's top tier of countries, which are described as major trading partners that handle large volumes of China-linked goods and serve as significant export platforms to the U.S.
Specifically, the report highlights India's Pune-Gujarat-Chennai production belt as a location where components like pumps and compressors are processed, impacting industrial supply chains in the U.S. The U.S. Trade Representative's office is also conducting an investigation into excess capacity, which could lead to further tariffs on India.
The White House report explains that this practice, known as tariff arbitrage, allows Chinese products facing high U.S. tariffs to be rerouted through countries with lower tariff rates. This results in lost revenue for the U.S. government and profits for exporters. The report estimates that approximately $67 billion in U.S.-bound goods were transshipped from China through major hubs including Mexico, India, and Vietnam in 2025, leading to an estimated $28 billion in lost tariff revenue.
Sources reviewed
Project Chintan independently synthesized and analyzed information cross-checked across the sources listed above.
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