Mexico has imposed up to 50% tariffs on imports from non-preferential trade partners, including India, with effect from January 1, 2026, the two nations have started discussions for a free-trade agreement (FTA). Analysts said the key targets of the South American nation's unilateral decision to raise tariffs are autos, auto parts, textiles, apparel, plastics, steel, metals and footwear.
Under the decision, Mexico will impose steep import tariffs - ranging from about 5 per cent to as high as 50 per cent on a wide range of goods (about 1,463 tariff lines) from countries that do not have free trade agreements with Mexico, including India, China, South Korea, Thailand and Indonesia. However, the list of items covered is yet to be officially notified. The higher duties will take effect on January 1, 2026.
Jahol Prajapati, research analyst at SAMCO Securities, said, "Mexico's Senate has cleared a protectionist tariff package imposing 5-50% duties on more than 1,400 import lines from countries without FTAs, including India, effective 1 January 2026. Autos, auto parts, textiles, apparel, plastics, steel, metals and footwear are key targets; most products will cluster around the 35% slab, but passenger vehicle duty will jump from 20% to 50%. India exported goods worth about 5.7 billion US dollars to Mexico in FY202425, with vehicles contributing roughly one-third."
He added that Indian car exports to Mexico, primarily from Volkswagen/Skoda, Hyundai, Maruti Suzuki and Nissan, face a direct impact, threatening volumes and margins in a market that accounts for about 9% of India's global automobile exports. Beyond autos, elevated tariffs on engineering goods, electronics and metals risk demand compression, though some specialised Indian products with strong market share may see price-led, not volume-led, damage.
Mexico's Senate has approved a new tariff measure on December 11, 2025, and it has since been cleared by both chambers of Congress. It is aimed at boosting manufacturing and reducing trade imbalances.
India, in fact, was engaged with Mexico during the initial tabling of a bill in this regard. The Embassy of India in Mexico raised the issue with the Ministry of Economy on September 30, 2025, itself, seeking special concessions to shield Indian exports from the new tariffs.
Both the countries are looking to start negotiations for a free trade agreement, and terms of reference (ToR) to initiate the talks formally are expected to be finalised soon.
Experts said that the trade agreement will help insulate Indian companies from these tariffs, which were imposed under pressure from the US to align with America on increasing tariffs against China and prevent transhipment to America.
India's exports to Mexico stood at $5.75 billion in 2024-25, while imports were $2.9 billion.