Mexico's tariffs to hit India's auto, metal, electronics exports: Experts
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New Delhi: A decision of Mexico to increase tariffs will severely hit India's exports of automobiles, auto components, electronics, metals and chemicals to the South American country, experts say.
For India, the measures affect nearly three-quarters of its $5.75 billion exports to Mexico in FY 2025, fundamentally altering the commercial logic of accessing the Mexican market, they said.
Mexico's Senate approved the new tariff measure on December 11, 2025, and it has since been cleared by both chambers of Congress.
The higher duties will take effect on January 1, 2026. 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 from countries that do not have free trade agreements with Mexico, including India, China, South Korea, Thailand and Indonesia.
"Automobiles and auto components, India's largest export segment to Mexico, will be among the worst affected," think tank GTRI said.
Passenger vehicles, with exports of $ 938.35 million in FY2025, face a tariff increase from 20 per cent to 35 per cent, sharply eroding price competitiveness in a market increasingly shaped by USMCA (US-Mexico-Canada Agreement) sourcing rules, the Global Trade Research Initiative (GTRI) said. It added that the impact is even more severe for auto components, which accounted for $ 507.26 million in exports.
Tariffs rise steeply from 10-15 per cent to 35 per cent, disrupting India's deep integration into Mexico-based automotive supply chains that serve the US market. Motorcycles, another Indian stronghold with exports of $ 390.25 million, see duties increase from 20 per cent to 35 per cent, threatening volumes, margins and brand presence for Indian manufacturers," GTRI Founder Ajay Srivastava said.
Sharing similar views, Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said Mexico's decision to impose tariffs of up to 50 per cent on imports from India is a matter of concern, particularly for sectors like automobiles and auto components, machinery, electrical and electronics, organic chemicals, pharmaceuticals, textiles and plastics.
"Such steep duties will erode our competitiveness and risk disrupting supply chains that have taken years to develop," Sahai said, adding that this development also underlines the little urgency for India and Mexico to fast-track a comprehensive trade agreement.
