NEW DELHI: As India is still navigating ways to recover from the US tariff heat, Mexico has also slapped a steep tariff on several Indian items. Mexico's Congress has approved a bill that seeks to impose higher tariffs up to 50% on imports from India, China, Brazil and several other countries who are not having free trade agreements with the country.
The tariff will take effect on January 1, 2026, after the lower house approves it. The tariff will be imposed on items like auto parts, light vehicles, plastic, toys, textiles, furniture, footwear, clothing, aluminium and glass. The proposed tariffs will range from 5% to 50%. The automobile sector is going to be the worst-hit as Mexico is India's third-largest car export market after South Africa and Saudi Arabia. India’s total export to Mexico stood at $5.7 billion in 2024-25 with a trade surplus of $2.8 billion.
India’s trade surplus with the country has gone up by nearly 12 times from 0.24 billion in 2020-21 to $2.87 billion in 2024-25. Mexico’s new tariffs on Asian imports are broadly aligning with US efforts to tighten trade barriers against China, along with other Asian nations. The Society of Indian
Automobile Manufacturers, an industry group that includes representatives of car exporters like VW, Hyundai and Suzuki among its members, had previously urged India’s commerce ministry in November to press Mexico to “maintain status quo” on tariffs for vehicles shipped from India, Reuters reported. Even export bodies like the Engineering Exports Promotion Council (EEPC) had written to Commerce Minister Piyush Goyal asking him to begin talks with Mexico on a potential FTA to mitigate the risk of the US tariff.
“We have also proposed FTAs with key Latin American countries such as Chile, Peru, and Mexico to get duty-free market access. This will also help us to de-risk from the US,” Pankaj Chadha, Chairman, EEPC India, had said. The proposed bill by the Mexican government also include textile sector that could face high tariffs. The Indian textile sector is already facing challenges due to 50% US tariff.