White House Flags India In Tier 1 Of China Transshipment Risk Report

The White House has identified India as a Tier 1 country in a report examining nations with elevated risk of being used for rerouting Chinese goods. The 25-page document, titled "The Great Transshipment Scam," lists over 40 countries under "Diversified Scale Leaders," including India alongside Canada, the European Union, Japan, South Korea, Taiwan, Mexico and Israel.

However, the report does not impose new tariffs on Indian exports nor suggest that most Indian goods violate US customs rules. Instead, it labels India as a potential "enabler" of China-linked transshipment through limited assembly, repackaging, relabelling or documentation changes. The assessment specifically highlights the Pune-Gujarat-Chennai manufacturing corridor as a potential route for products classified under HS codes 8413 and 8414.

While transshipping goods through a third country is not illegal, it becomes a violation when exporters falsely claim a new country of origin for products with insufficient processing, often referred to as "substantial transformation." The report comes as India and the US work towards finalizing an interim bilateral trade agreement, which already includes rules of origin to ensure trade benefits accrue primarily to products genuinely manufactured in either nation.