White House report flags India among economies at risk of Chinese goods being routed through third countries to avoid US tariffs
A recent US White House report has placed India among more than 40 economies facing elevated risks of Chinese goods being routed through third countries to circumvent American tariffs, raising fresh questions over supply-chain transparency and rules of origin.
The report, The Great Transshipment Scam, released on August 13, alleges that Chinese exporters have used third countries for limited processing, repackaging, relabelling or other activities before sending goods to the US as products originating elsewhere. India is classified in the report’s top-tier group alongside Canada, the European Union, Japan, Mexico, South Korea, Taiwan and Israel.
The report specifically highlights the Pune-Gujarat-Chennai manufacturing belt in connection with pumps and compressors. It compares the Indian production corridor with industrial centres in Cincinnati, Dayton and Columbus in the US.
However, the report does not identify any specific Indian company as having violated US customs rules. Trade experts have also stressed that using Chinese components does not automatically make an Indian-made product Chinese-origin. The key issue is whether sufficient manufacturing or “substantial transformation” takes place in India before export.
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A US Commerce Department analysis cited in the report estimates that about $67 billion worth of goods destined for the US were transshipped through Mexico, India and Vietnam in 2025
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The figure covers all three countries and does not represent an allegation that India alone accounted for that amount
The developments could increase compliance pressure on Indian exporters, particularly those dependent on Chinese components or complex Asian supply chains. Companies may face greater demands to document manufacturing processes, component origins and production capacity.
India has sought further information from Washington on the allegations, while trade analysts have called for closer examination of the data before drawing conclusions about the scale of any wrongdoing.
The US is also preparing stronger technology-led customs enforcement, including an AI-based system intended to identify suspicious supply-chain patterns and improve detection of potential transshipment.
