NEW DELHI – Mexico imposed up to 50 per cent tariffs on goods from India and other Asian nations without trade pacts on Thursday. The Senate approved Mexico tariffs measure at 4:35 PM. It targets over 1,400 products starting in 2026. India’s Commerce Ministry monitors the impact on its $8.9 billion annual exports to Mexico.
Mexico’s tariffs on India disrupt South Asia’s trade flows. They raise costs for key sectors, such as autos and textiles. This protectionism echoes global tensions, squeezing emerging exporters amid pressures from the USMCA.
Mexico 50% Tariffs Asian Imports Target Non-FTA Nations
Mexico’s Economy Ministry announced a 50% tariff Asian imports from countries lacking free trade agreements. Affected nations include China, India, South Korea, Thailand, and Indonesia. The policy shields local industries from cheap imports.
Tariffs apply to a wide range of products, including automobiles, parts, textiles, apparel, plastics, metals, footwear, and more. Most items face a 35 per cent duty, with peaks of up to 50 per cent for sensitive lines. The decree passed the Senate with 76 votes in favour, five against, and 35 abstentions.
Economy Minister Marcelo Ebrard explained the rationale behind the decision. “This measure protects Mexican products and jobs in priority sectors,” he stated in a press release. Chinese auto imports surged to 20 per cent of Mexico’s market from near zero six years ago. The hikes counter such gains.
Implementation rolls out in phases through 2026. The ministry gains authority to adjust rates on non-FTA imports flexibly. Expected revenue hits 52 billion pesos, or USD 2.6 billion, aiding fiscal deficit reduction.
Trade data shows India’s exports to Mexico reached USD 8.9 billion in FY24. Imports from Mexico totalled USD 3.1 billion, yielding a USD 5.8 billion surplus. Automobiles and parts comprise 25 percent of shipments, while textiles account for 18 percent.
India Mexico Trade Tariffs: Sectoral Impacts Emerge
India and Mexico trade tariffs threaten competitiveness in North American chains. Mexican manufacturers warn of higher input costs and inflation. Indian firms in Mexico’s supply networks face squeezes.
Auto components, a top export, now face 35-50 percent duties. This disrupts just-in-time deliveries for US-bound vehicles. Textiles and apparel, vital for apparel hubs, see similar hikes.
The Federation of Indian Export Organisations flagged concerns. “These tariffs will erode our market share in Mexico,” said Ajay Sahai, director general. Steel and plastics, key industrial inputs, also qualify.
Bilateral trade increased 15 percent year-over-year to USD 12 billion. Mexico ranks as India’s 25th largest export destination in Latin America. Pharmaceuticals, which are exempt so far, hold steady at 12 percent of exports. USMCA review pressures fuel the move. Mexico aligns with US efforts to curb Asian transshipments. Indian steel exports to the US via Mexico could face scrutiny.
Commerce Secretary Sunil Barthwal convened a meeting. Officials assess mitigation strategies. No formal response issued yet. Exporters are urged to explore alternatives, such as Vietnam.
Mexico Tariffs India: Broader Trade Dynamics Shift
Mexico’s tariffs on India amplify global protectionism trends. South Asian exporters pivot amid rising barriers. Bangladesh and Pakistan face similar exposures in the textile industry.
The decree softens initial proposals, easing two-thirds of tariff lines. Yet, it grants broad ministerial powers. This flexibility aids quick responses to market shifts.
Mexican industry groups support the policy. The Automotive Industry Council noted job safeguards. “Imports undercut local production,” a spokesperson said. India’s response focuses on diversification. Efforts target Africa and Latin America for new markets. Domestic incentives enhance value-added exports.
Bilateral ties remain strong. High-level visits planned for 2026 mark 75 years of relations. Joint working groups on trade could address frictions. Economic projections indicate a minimal GDP impact for India, at 0.1 percent. Yet, small exporters in Gujarat and Tamil Nadu bear the brunt of this. Over 500 firms ship to Mexico annually.
Background: Evolution of India-Mexico Trade Ties
India and Mexico established diplomatic relations in 1950. Trade surged post-2000s liberalisation. A 2009 limited PTA covers 90 per cent of lines but excludes key sectors.
Exports boomed in autos post-2010. Tata and Mahindra set up plants. Pharma ties deepened with generics supply. The USMCA, effective in 2020, reshaped the dynamics. Rules of origin tightened, favouring North American content. Asian firms rerouted via Mexico.
Recent pacts like I2U2 enhance resilience. Yet, non-FTA status exposes India to such hikes. Cumulative FDI from Mexico totals USD 1.2 billion in the automotive and chemical sectors. Indian investments in Mexico hit USD 3 billion.
What’s Next: Navigating Mexico Tariffs, India Challenges
India aims to initiate FTA negotiations with Mexico by 2027. Commerce Ministry drafts proposals. Exporters seek duty remission schemes. Mexico plans quarterly reviews. Adjustments are possible based on import data. Mexico’s tariffs on India test bilateral resilience. Strategic dialogue can turn barriers into opportunities for deeper integration.
Published in SouthAsianDesk, December 11th, 2025
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