Mexico's 50% Tariff on Indian Goods

In order to safeguard domestic industry and lessen trade imbalances, Mexico has approved hefty tariffs up to 50% on imports from India and other non-FTA nations, which will take effect on the 1st of January 2026, and target about 1,463 product categories.

Tariff Details and Impact

The industries covered by the duties, which vary from 5% to 50%, include steel, chemicals, aluminum, glass, textiles, plastics, toys, footwear, furniture, autos (with cars ranging from 20% to 50%), and auto parts. Exporters such as Volkswagen, Hyundai, Nissan, and Maruti Suzuki [finance: Maruti Suzuki India are particularly hard hit by India's $1 billion car exports to Mexico, its third-largest market after South Africa and Saudi Arabia. In FY25, India's overall exports to Mexico were $5.7 billion, with a $2.8 billion surplus that has increased significantly.

Reasons Behind the Move

The law was enacted by Mexico's Senate on the 11th of December in response to pressure from the US under President Donald Trump to limit indirect Chinese shipments through Mexico and comply with evaluations of the US-Mexico-Canada Agreement. The policy adjustment aims to increase local jobs amid warnings from Mexican firms about higher consumer expenses and inflation.​

India's Response

While engaging diplomatically, India promises to take "appropriate measures" to safeguard exporters; the embassy voiced concerns in September, and high-level negotiations with Mexico's Economy Ministry are still ongoing. To stabilize $5.7 billion in bilateral commerce and perhaps exempt Indian goods, both countries will soon begin FTA negotiations. Preemptive action was recommended by trade associations such as SIAM and EEPC.