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The U.S. has again flagged India as a country enabling China to evade its tariffs, according to a new White House report titled 'The Great Transhipment Scam'. The report singles out the Pune-Gujarat-Chennai belt in India as a major hub for this illicit activity. This comes at a time when the U.S. has imposed a 10% tariff on India for not adequately addressing forced labor imports, and is considering up to 100% tariffs on Russian oil imports.

The White House report identifies more than 40 countries, including India, as part of China's 'Shadow Transshipment Network', facilitating the evasion of U.S. tariffs. The report classifies these countries into three tiers based on the extent of their transgressions. India's involvement stems from its role as a major hub for reprocessing and re-exporting goods from China, which allows Chinese exporters to circumvent U.S. tariffs by routing their products through countries with lower tariff rates.

This practice, known as tariff arbitrage, results in significant revenue losses for the U.S. government and profits for the exporters. The report estimates that approximately $67 billion in U.S.-bound goods were transshipped through top hubs like Mexico, India, and Vietnam in 2025, resulting in an estimated $28 billion in lost tariff revenue.