U.S. alleges India's role in 'The Great Transhipment Scam' to evade tariffs
The U.S. has accused India, among 40 other countries, of being a top 'enabler' in 'The Great Transhipment Scam,' where goods from China are re-routed through third countries to evade U.S. tariffs. This practice, detailed in a White House report, allegedly resulted in $28 billion in lost tariff revenue for the U.S. in 2025. The U.S. claims these countries marginally modify Chinese goods before exporting them at lower tariffs. This accusation follows previous U.S. criticisms of India's trade policies and could lead to further penal actions, impacting India's manufacturing and growth story, which relies on Chinese inputs.
Key Points
- The U.S. has accused India of facilitating China's evasion of U.S. tariffs through 'The Great Transhipment Scam'.
- India is named among over 40 countries identified as 'enablers' in re-routing Chinese goods.
- The U.S. Office of Trade and Economic Analysis estimates $28 billion in lost tariff revenue due to transshipment in 2025.
- This allegation could lead to further U.S. penal actions against India, impacting its manufacturing and economic growth.
- The U.S. tariff policy, initiated under Section 301 of the Trade Act of 1974, has shifted import sources but not reduced overall dependence on imports.
Exam Facts
- The White House published a report titled 'The Great Transhipment Scam'.
- The U.S. imposed tariffs on Chinese goods under Section 301 of the Trade Act of 1974.
- The U.S. estimates $67 billion in goods were transshipped, leading to $28 billion in lost tariff revenue in 2025.
- Ajay Srivastava, founder of the Global Trade Research Initiative, commented on the U.S. tariff policy.
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