India Engages Mexico Over 50% Tariff Hike, Signals Possible Countermeasures

New Delhi: India has raised concerns over Mexico’s unilateral decision to impose a 50% tariff on goods imported from countries without a free trade agreement, including India. The new tariff regime, approved by the Mexican Senate, will take effect from January 1, 2026, and mirrors similar actions taken by the United States.
An Indian official confirmed that New Delhi is actively engaged with Mexico to find a mutually acceptable solution while reserving the right to take appropriate measures to safeguard the interests of Indian exporters. The impact of these tariffs will depend on the importance of Indian exports to Mexico’s domestic supply chains and the ability of Indian firms to secure exemptions or pass on costs to local consumers.
The tariffs target a wide range of sectors, including automobiles and auto components, machinery, electrical and electronics, organic chemicals, pharmaceuticals, textiles, and plastics. Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai described the move as a serious concern, noting that steep duties could disrupt long-established supply chains and undermine India’s competitiveness in these sectors.
Mexico has justified the tariff increase as a measure to protect domestic industry and employment and to address distortions caused by low-cost imports. The move follows warnings from the United States about cheap Chinese goods entering the US via Mexico.
India has already raised the issue with Mexico’s Ministry of Economy through its embassy in Mexico City and is exploring avenues to minimize the adverse effects on Indian exporters. Both nations are also preparing to begin formal negotiations on a free trade agreement, with terms of reference expected to be finalised shortly. A high-level meeting between Commerce Secretary Rajesh Agrawal and Mexico’s Vice Minister of Economy Luis Rosendo has taken place, with technical discussions to follow.
Bilateral trade between the two countries stood at $8.9 billion in exports from India to Mexico and $2.9 billion in imports in 2024. India has emphasised its commitment to maintaining a stable and balanced trade relationship while ensuring that Indian businesses are not disproportionately affected by the new duties.