What are the U.S.’s latest allegations against India? | Explained
Why has the U.S. accused India of violating what it considers fair trade practices? How many countries have been named in the Great Transhipment Scam? What do these allegations mean for India? Can they impact India’s growth story?
The U.S. has accused India of helping China evade U.S. tariffs through a practice known as "elevated illegal transhipment risk." This report, titled 'The Great Transhipment Scam,' identified India as one of the top enablers of China's tariff evasion, along with countries like Mexico, Canada, the European Union, Japan, and South Korea.
The U.S. believes that Chinese exporters are shipping goods through these countries, making minor modifications, and then exporting them to the U.S. at lower tariffs than if they were imported directly from China. This alleged practice has reportedly resulted in a loss of around $28 billion in tariff revenue for the U.S. government, attributed to the transshipment of approximately $67 billion in U.S.-bound goods through these hubs in 2025.
The report specifically mentioned the Pune-Gujarat-Chennai production belt in India, stating that this region absorbs pumps and compressors from China, impacting industrial supply chains in the U.S. Despite these allegations, no penal actions have been taken against India yet. However, the U.S. has threatened to impose tariffs as high as 100% on India for its Russian oil imports and has also imposed a 10% tariff on Indian imports due to concerns about forced labor in the country.
Written by urgent.news from The Hindu's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
