India Should Avoid Becoming a Conduit for Unethical Trade, Pg15

Key Highlights:

• India's Commerce Minister Piyush Goyal emphasized that India must avoid becoming a conduit for unethical trade and focus on genuine value addition to its exports.
• This statement follows a U.S. White House report, "The Great Transhipment Scam," released on August 14, 2026, which accused over 40 countries, including India, of being part of a "shadow transhipment network" for Chinese goods.
• The report categorized India as a Tier 1 country, indicating a high risk of illegal transhipment embedded within legitimate trade flows.
• Goyal is scheduled to visit the U.S. in late September 2026 to attend the G-20 Trade Ministerial in Milwaukee and hold bilateral talks with United States Trade Representative (USTR) Jamieson Greer.
• India stated it would finalize the Bilateral Trade Agreement (BTA) with the U.S. only if Washington offers preferential tariff rates compared to India's competitors.

Detailed Insights:

• The U.S. report estimates that illegal transhipment could be worth approximately $60-67 billion, leading to significant lost tariff revenue and displaced jobs in the U.S.
• India aims for its Country of Origin Certificates to carry significant weight, ensuring the true economic origin of goods is accurately reflected.
• The U.S. had imposed an additional 10% tariff on several countries, including India, from July 24, 2026, impacting ongoing trade negotiations.
• India has already implemented trade pacts with the UK, Mauritius, Oman, UAE, and Australia, with agreements with New Zealand and the EU expected to go live soon.
• India is actively negotiating or reviewing Free Trade Agreements (FTAs) with several other blocs and countries, including Canada, Mexico, Chile, Mercosur, SACU, GCC, Israel, ASEAN, Korea, and Japan, aiming for preferential access to 75% of global trade.
• The G-20 Trade Ministerial will address issues such as ending forced labor, updating the Most-Favored Nation (MFN) principle, and tackling structural excess capacity.

Key Concepts Involved:

• Transhipment: The transfer of cargo from one vessel or mode of transport to another during its journey to the final destination, often used to optimize routes or bypass restrictions.
• Country of Origin Certificate: An official document that certifies the country where goods were manufactured, crucial for determining tariffs, trade agreements, and compliance.
• Bilateral Trade Agreement (BTA): A trade arrangement negotiated between two countries to establish mutually agreed rules governing economic exchanges, often covering tariffs, market access, and non-tariff barriers.
• Free Trade Agreement (FTA): An agreement between two or more countries to reduce or eliminate tariffs, quotas, and other trade barriers to facilitate trade.
• United States Trade Representative (USTR): A cabinet-level position responsible for developing and coordinating U.S. international trade policy, overseeing negotiations, and acting as the President's chief trade advisor.