The latest accusation levelled by the United States against India has the potential to be the most harmful to the Indian economy. A recent White House report, naming around 40 countries in all, has said that India ranks among the top ‘enablers’ of China’s evasion of U.S. tariffs. The accusation is that India and these other countries are importing Chinese goods, making minor modifications to them, and then exporting them to the U.S. at lower tariffs than what Chinese goods would have faced. The fact that Chinese imports form a significant pillar of Indian manufacturing is no secret. Yet, the nature of these imports is slowly changing. India is gradually moving away from importing finished products, making cosmetic changes, and selling them. Instead, the share of intermediate goods in Indian imports from China has been steadily rising. That is, India is doing much of its own assembly and manufacturing in several sectors now, relying on China and other countries for the parts needed. This shift is an important step towards full-scale manufacturing in India. The U.S. has not yet announced punitive actions based on its assessment of apparent Chinese tariff evasion, though that eventuality is conceivable. However, should it do so, India must resist bowing to U.S. pressure on this issue. As even the government has admitted, Chinese imports right now are an important part of the Make in India story.

The fear of India bowing to U.S. pressure is based on precedent. In his first term as U.S. President, Donald Trump railed against India’s tariffs on high-end motorcycles. In 2018, India cut these tariffs to 50% from the earlier 60%-75%, and then cut them further to 40% in February 2025, before trade deal talks had even started. Similarly, it slashed the import duties on shrimp feed and its components in the February 2024 Budget, a key ask of the U.S. It did the same with tariffs on frozen duck and turkey. The pressure of the 50% punitive tariffs pushed India to diversify away from Russian oil, despite India’s strident claims of energy sovereignty and the discount it was receiving. Russia’s share in India’s oil imports fell to below 20% in January 2026, from nearly double that when the 50% tariffs were imposed six months earlier. This had happened with Venezuelan oil in 2019 as well. It was the West Asia crisis, and the U.S.’s temporary reprieve, that has seen India turning back to Russian oil. Allowing FDI in the e-commerce inventory model, as India recently did, was something Amazon had been lobbying for for a decade, and a dilution of India’s long-held stance. The U.S. can wield immense pressure and so concessions are understandable. But that has emboldened it to make increasing demands. India needs to start pushing back.