𝐈𝐧𝐝𝐢𝐚 𝐍𝐚𝐦𝐞𝐝 𝐢𝐧 𝐔𝐒 ‘𝐒𝐡𝐚𝐝𝐨𝐰 𝐓𝐫𝐚𝐧𝐬𝐡𝐢𝐩𝐦𝐞𝐧𝐭 𝐍𝐞𝐭𝐰𝐨𝐫𝐤’
A new US report has placed India among more than 40 countries allegedly connected to a “shadow transhipment network”, where Chinese-made products are reportedly routed through third countries before entering the US to avoid tariffs.
The report divides these countries into three risk categories. India, Mexico, Canada and the European Union are in Tier 1, where the US identifies transhipment risks within large and legitimate trade flows.
The report estimates that around $67 billion in US-bound goods were transhipped from China through major hubs, including India, Mexico and Vietnam, during 2025.
𝐖𝐡𝐲 𝐈𝐧𝐝𝐢𝐚’𝐬 𝐓𝐢𝐞𝐫-𝟏 𝐏𝐥𝐚𝐜𝐞𝐦𝐞𝐧𝐭 𝐌𝐚𝐭𝐭𝐞𝐫𝐬
India’s classification could have a direct impact on India-US trade relations, particularly as both countries continue discussions around trade and tariffs.
Trade experts believe the US could push for stronger measures to prevent China-related tariff evasion and greater transparency in Indian supply chains.
Key areas to watch include:
Closer checks on Indian exports entering the US market
Greater pressure to reduce dependence on Chinese imports
Possible additional scrutiny of products considered vulnerable to transhipment
Higher compliance and country-of-origin requirements for exporters
Potential implications for Indian manufacturing and global supply chains
However, experts have also raised an important point: products manufactured in India using imported Chinese components are not necessarily the same as goods simply being rerouted through India.
𝐈𝐧𝐝𝐢𝐚’𝐬 𝐌𝐚𝐧𝐮𝐟𝐚𝐜𝐭𝐮𝐫𝐢𝐧𝐠 𝐒𝐞𝐜𝐭𝐨𝐫 𝐅𝐚𝐜𝐞𝐬 𝐍𝐞𝐰 𝐒𝐜𝐫𝐮𝐭𝐢𝐧𝐲
Indian trade researchers have highlighted the country’s growing manufacturing capabilities and strong export volumes.
The Pune–Gujarat–Chennai manufacturing corridor, specifically mentioned in the US report in connection with pumps and compressors, has an established domestic manufacturing base.
India exports significant quantities of pumps, compressors and other industrial products to markets worldwide, including the US.
This creates a key question for Indian exporters: could legitimate Indian manufacturing and genuine domestic value addition face additional scrutiny simply because some supply chains have links to China?
𝐖𝐡𝐚𝐭 𝐂𝐨𝐮𝐥𝐝 𝐓𝐡𝐢𝐬 𝐌𝐞𝐚𝐧 𝐅𝐨𝐫 𝐈𝐧𝐝𝐢𝐚𝐧 𝐄𝐱𝐩𝐨𝐫𝐭𝐞𝐫𝐬?
If the US introduces stricter tariff enforcement and origin checks, businesses exporting from India could face additional documentation and compliance requirements.
For manufacturers and exporters, maintaining clear records of:
Country of origin
Raw materials and components
Domestic value addition
Manufacturing processes
Supply-chain documentation
could become increasingly important.
This could particularly matter for Indian companies operating in sectors where Chinese inputs form part of the manufacturing chain.
𝐖𝐡𝐚𝐭 𝐂𝐨𝐮𝐥𝐝 𝐇𝐚𝐩𝐩𝐞𝐧 𝐍𝐞𝐱𝐭?
The US report could potentially pave the way for tighter trade enforcement, additional origin checks or future tariff measures.
For India, the challenge is to strengthen its position as a reliable global manufacturing hub while maintaining strong economic ties with the US and managing its dependence on Chinese supply chains.
The issue is therefore bigger than India, China and US tariffs. It could influence how companies structure supply chains, source components and demonstrate the origin of products in international markets.
𝐊𝐞𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲
India’s inclusion in the US shadow transhipment network does not by itself establish that Indian exporters are illegally avoiding tariffs. However, it signals the possibility of greater scrutiny of Indian exports and supply chains.
As India-US trade continues to evolve, businesses may need to focus more strongly on transparent sourcing, accurate origin documentation and genuine domestic value addition.
The bigger question remains: Can India strengthen its role in global trade without getting caught in the growing US-China tariff battle?