US claims on Indian role in Chinese goods rerouting face lack of concrete evidence

The US alleges India is aiding Chinese exporters to evade tariffs, but evidence remains thin amid ongoing trade diplomacy and shifting supply chains.

The Trump administration’s latest allegation that India is being used to reroute Chinese goods into the US may sound dramatic, but the evidence released so far is thin. A report titled “The Great Transshipment Scam” places India among 40 countries and blocs accused of helping Chinese exporters evade US tariffs, yet it offers no clear country-by-country proof that Indian firms have violated rules of origin or shipped goods without meaningful value addition.

The document points to pumps and compressors moving through the Pune-Gujarat-Chennai industrial belt, but that is not enough on its own to establish illegal transshipment. Analysts cited in the report’s wake have argued that the region has substantial manufacturing capacity, and that exports of pumps to the US and other markets exceed imports from China, which would be consistent with real processing rather than simple relabelling. In the case of compressors, domestic use of imported components also appears to explain much of the trade flow.

Washington says the issue is far larger. According to the Commerce Department, $67bn in US-bound goods were transshipped from China through Mexico, India and Vietnam in 2025, costing an estimated $28bn in tariff revenue. But the department has not broken out India’s share, and its broader case rests heavily on two trends: imports from China falling by about $109bn in 2025 while imports from other countries rose by about $156bn. That alone does not prove diversion. It could also reflect genuine shifts in sourcing, assembly and value addition outside China.

For India, the immediate lesson is not panic but caution. The two countries have also been trying to manage trade tensions more constructively: in February, the US and India announced a framework for an interim reciprocal trade agreement aimed at reducing tariffs on US industrial goods and a range of farm products, while another February White House statement described a wider trade deal that would cut tariffs on Indian imports. Against that backdrop, a new tariff offensive would risk undercutting a fragile reset. India should press Washington for shipment-level evidence, respond factually, and keep its focus on a separate but related problem at home: the rising import content of its own exports.