India, Aug. 14 -- Nearly 40 countries, including India, have been accused by the United States of being part of a "shadow transhipment network" that allowed Chinese goods hit by high US tariffs to enter the American market after being routed through third countries with lower tariffs.

In the report titled "The Great Transhipment Scam", US President Donald Trump's adviser Peter Navarro puts the value of potentially illegal transhipment at around $60 billion. The report says this resulted in tens of billions of dollars in lost tariff revenue for the US government.

The report calls for firm action against countries that allow tariffed goods to be rerouted to avoid US law. The proposed measures include immediate interdiction, penalty tariff...