US accuses India of enabling Chinese tariff evasion in transhipment report

The White House has accused India of being one of the top enablers of Chinese tariff evasion in a report titled 'The Great Transhipment Scam' published in August 2026. The report alleges that India, along with Mexico, Canada, the European Union, Japan and South Korea, is routing Chinese goods to the US after minimal modification to avoid high tariffs imposed under Section 301 of the Trade Act of 1974.

The US estimates that about $67 billion in goods were transshipped from China through India, Mexico and Vietnam in 2025, costing an estimated $28 billion in lost tariff revenue. It specifically named the Pune-Gujarat-Chennai production belt as a hub that "absorbs" Chinese pumps and compressors, affecting industrial supply chains in Ohio cities like Cincinnati, Dayton and Columbus. The report suggests the US tariff policy has failed to reduce overall import dependence, as total US imports rose from $2.41 trillion to $3.50 trillion while Chinese imports fell.

The Hindu reports that industry sources question the allegations, noting that many companies exporting pumps from India are American multinationals listed on the New York Stock Exchange. Indian pump exports to the US are valued at about Rs 4,000 crore, with only a fraction from Indian firms. Indian manufacturers said they have spent years designing pumpsets to US standards and cannot sell them elsewhere. No penal action has been taken yet against India, but US President Donald Trump could impose further tariffs on countries deemed to be helping China evade duties.