Washington: The United States has identified India as a Tier 1 Diversified Scale Leader in a new trade enforcement report examining the alleged use of third countries to help Chinese goods bypass American tariffs.
The report, The Great Transshipment Scam, places India alongside the European Union, Canada, Mexico, Japan and South Korea as major global trading hubs where the risk of transshipment is considered significant because of the scale and diversity of imports entering the US. The designation does not accuse all trade from these economies of being illegal but highlights them as locations requiring closer scrutiny.
According to the report, India, Mexico and Vietnam were the three largest destinations for Chinese origin goods that were allegedly rerouted in 2025. Together, they accounted for an estimated 67 billion dollars worth of transshipped goods.
US Trade and Manufacturing Counsellor Peter Navarro alleged that Chinese exporters have increasingly relied on third countries for limited processing, relabelling, repackaging and routing changes to make products appear to originate elsewhere while retaining substantial Chinese content. He argued that the practice expanded after the United States imposed Section 301 tariffs on China in 2018.
The report also drew attention to India’s Pune, Gujarat and Chennai manufacturing corridor, claiming that Chinese components processed in the region could enter American supply chains under Indian origin labels, affecting domestic manufacturers in several US industrial cities.
Alongside the report, the Trump administration announced plans to introduce an AI powered border enforcement system known as Detective Border. The platform will assist US Customs by analysing shipment records, trade routes, corporate ownership, manufacturing capacity and product classifications to identify high risk consignments before they enter the American market.
Washington says the technology is intended to distinguish legitimate global manufacturing from illegal pass through trade and strengthen tariff enforcement through targeted inspections and penalties.
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