According to the Economic Times, a US report authored by Peter Navarro, Counsellor to the President for Trade and Manufacturing, has classified India and 40 other countries as enablers of Chinese goods bypassing US tariffs. The report, titled 'The Great Transshipment Scam', estimated the annual value of illegally transshipped goods at $40–303 billion across the 41 countries, the Economic Times reported. India is categorised among the top "enablers" in the report.
Report singles out Pune-Gujarat-Chennai corridor
According to the Economic Times, the US identified India's Pune-Gujarat-Chennai belt among the "Ugly Sister City pairs or areas enabling China to evade tariffs". The report did not disclose India's share of transshipment or identify the concerned exporters.
$67 billion routed through Mexico, India and Vietnam
Per the report, around $67 billion in US-bound goods were trans-shipped from China through the top hubs — Mexico, India, and Vietnam — in 2025, producing an estimated $28 billion in lost tariff revenue. The report also alleged that Chinese exporters are increasingly routing goods through third countries. It listed limited assembly, finishing, repackaging, relabelling, or documentation changes as steps that could create the appearance of a different national origin.
| Metric | Figure |
|---|---|
| Estimated annual value of illegally transshipped goods | $40–303 billion across 41 countries |
| US-bound goods trans-shipped via China through top hubs in 2025 | $67 billion |
| Estimated lost US tariff revenue | $28 billion |
| US tariff currently imposed on India under Section 301 forced-labour probe | 10% |
| Proposed US tariff on India among top five importers of Russian oil and gas | up to 100% |
Tariff arbitrage at the centre of the scheme
The report highlighted that tariff arbitrage lies at the heart of this trans-shipment arrangement, according to the Economic Times. When a Chinese product that faces a high US tariff is routed through a country with a lower tariff rate, that difference becomes a loss of revenue for the US.
The report highlighted that tariff arbitrage lies at the heart of this trans-shipment arrangement, with the tariff-rate difference becoming lost US revenue.
How the scheme is executed
Chinese exporters are increasingly routing goods through third countries, according to the report. The steps named as potential origin-concealment methods include:
- Limited assembly
- Finishing
- Repackaging
- Relabelling
- Documentation changes
The report argued these activities could create the appearance of a different national origin.
Broader US–India tariff context
The Economic Times reported that the development comes at a time when the US has imposed a 10% tariff on India under a Section 301 probe on forced labour. Washington is also in the process of enacting legislation that would see tariffs of up to 100% imposed on India among five countries for being the top importers of Russian oil and gas. Both sides are also negotiating a trade deal.
The report's list of top hubs includes India alongside Mexico and Vietnam, although the report did not disclose India's share or identify the concerned exporters.
Details available to customs brokers and importers
Because the report did not disclose India's share or identify exporters, it provides no entity-level enforcement list. The indicators named — limited assembly, finishing, repackaging, relabelling, and documentation changes — together with the Pune-Gujarat-Chennai corridor and the top-hub grouping of Mexico, India, and Vietnam, are the concrete details trade compliance teams can verify against shipment records. The $67 billion transshipped through top hubs in 2025 and the $28 billion revenue-loss estimate set the scale of the issue the US is targeting, according to the report.
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