Mexico has approved steep new tariffs of up to 50 per cent on imports from India, China and several other Asian economies, marking one of its most significant protectionist shifts in recent years.
The Mexican Senate passed the proposal this week, clearing the way for the revised duties to come into force next year, with a full rollout expected by 2026. The decision follows strong opposition from domestic industry associations as well as diplomatic pushback from the affected countries.
The move is particularly consequential given Mexico’s status as the United States’ largest trading partner, meaning any change in its import policy is likely to reverberate across North American supply chains.
According to a Reuters report, the tariff hike represents one of Mexico’s most forceful attempts in years to protect local manufacturers, and coincides with preparations for a crucial review of the United States–Mexico–Canada Agreement (USMCA).
Under the new structure, imports of cars, automotive components, textiles, clothing, plastics and steel from countries without a free trade agreement with Mexico will attract tariffs of up to 50 per cent. Most other products will face duties capped at 35 per cent.
The Mexican government expects the new tariffs to generate around USD 3.76 billion in additional revenue next year, which it plans to deploy towards reducing the country’s fiscal deficit.
The development comes at a time when trade between India and Mexico has been steadily expanding. India’s exports to Mexico almost doubled from USD 4.25 billion in 2020 to USD 8.98 billion in 2024, with a 6.5 per cent rise recorded even in 2023. Mexico’s exports to India also increased, reaching USD 2.74 billion in 2024, though India continues to maintain a significant trade surplus.
India’s export basket to Mexico includes motorcycles and other vehicles, electrical machinery and equipment, organic chemicals, aluminium and pharmaceuticals. The automotive sector, particularly two-wheelers and auto components has been a key driver of bilateral trade. Industry analysts now warn that the higher tariffs will inflate landed costs, erode competitiveness and compel Indian companies to reassess their supply-chain strategies for the North American market.
While Mexico argues that the tariff overhaul is necessary to protect domestic industries and stabilise public finances, the new regime signals a challenging period ahead for Indian exporters.
