The White House has flagged India as one of the key hubs in a global network that it says is being used to evade US tariffs on Chinese goods, placing the country among more than 40 nations identified in its "Shadow Transshipment Network".
India has been categorised as a "Tier-1 Diversified Scale Leader" in the report, alongside the European Union, Canada, Mexico, Japan and South Korea. The classification places India among the major global trade hubs where transshipment risks are considered significant because of the scale and diversity of legitimate trade flows into the US.
According to the White House report, India, Mexico and Vietnam emerged as the top three hubs for goods originating from China in 2025. The report estimates that around $67 billion worth of goods were transshipped through these three countries.
The US administration has specifically highlighted India's Pune-Gujarat-Chennai corridor as a route for pumps and compressors. It said Chinese companies can use India for minor processing before goods are shipped to the US, potentially benefiting from the difference between higher US tariffs on Chinese products and lower duties applicable to Indian-origin goods.
The report, however, notes that the transshipment risk involving India is embedded within broad and legitimate trade flows between the two countries. The White House has made combating tariff evasion a key part of its trade enforcement strategy, particularly as the US maintains significantly higher tariff barriers on Chinese goods.
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The report alleges that China-linked supply chains can exploit tariff differences by routing products through third countries, where limited processing or changes in documentation may make the goods appear to originate elsewhere. The US administration's latest assessment puts greater scrutiny on countries such as India that have become increasingly important links in global manufacturing and supply chains.
The White House report also points to the use of artificial intelligence by US Customs authorities to strengthen efforts against tariff evasion. US Customs is expected to deploy AI-driven tools to identify suspicious trade patterns and trace goods across complex international supply chains. The objective is to detect instances where products may be rerouted through third countries to avoid tariffs imposed on their original country of manufacture.
For India, the classification comes at a time when the country is seeking to strengthen its position as an alternative manufacturing and supply-chain destination for global companies.
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