The United States has leveled sensational allegations against India, accusing it of helping China evade American tariffs. Washington has made serious allegations that China is using a massive “shadow network” to escape the steep tariffs imposed on Chinese products aimed at curbing unfair trade practices, and that India is a participant in this network.
These claims were disclosed in a report titled “The Great Transshipment Scam,” recently released by the American government. Peter Navarro, trade advisor to President Donald Trump, officially released this special report. The superpower alleged that nearly 40 countries, including India, are part of this shadow network assisting China worldwide.
The United States typically imposes heavy tariffs and sanctions under “Section 301” regulations on countries deemed to be engaging in illegal or unfair trade practices. As part of this, the US had implemented strict sanctions on China under Section 301 back in 2018. However, the report made clear that since then, routes for illegally transporting Chinese goods to the US indirectly through other countries have increased significantly.
The allegation is that, instead of shipping Chinese products directly to the US, China routes them through a third country such as India, where minimal manufacturing or nominal processing is carried out to make it appear as though the goods originated there, allowing China to evade the steep tariffs imposed by the US. The superpower estimated that the value of this illegal transshipment trade conducted through third countries stands at approximately $303 billion. The report’s assertion that India, along with 39 other countries, is directly or indirectly aiding China in this scheme has sparked an international controversy.