India and Mexico are currently engaged in high-level discussions over the potential rise in tariffs on Indian exports, which Mexico’s Senate approved on December 11, 2025.
The duties were announced against countries that do not have free trade agreements (FTAs) with Mexico, including India, China, South Korea, Thailand and Indonesia.
While New Delhi reserves the right to take appropriate measures to safeguard the interests of its exporters, it values its partnership with Mexico and stands ready to work collaboratively toward a “stable and balanced trade environment that benefits businesses and consumers in both countries,” an official said on Saturday.
The official said that 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.
Further, 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 trans-shipment to America.
Also Read: Mexico’s tariffs on China, India imports may be as high as 50 pc
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.
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.
“The Department of Commerce is engaged with Mexico’s Ministry of Economy to explore mutually beneficial solutions which align with global trade rules,” the official said.
A high-level meeting in this regard between Commerce Secretary, Rajesh Agrawal, and Mexico’s Vice Minister of Economy, Luis Rosendo, has already taken place and follow on technical meetings are expected soon.
“India reserves the right to take appropriate measures to safeguard the interests of Indian exporters, while continuing to pursue a solution through constructive dialogue,” the official added.
The government official further said that the actual impact on Indian exports will depend on the criticality of Indian exports to domestic supply chains in Mexico and ability of Indian companies to secure exemptions or pass on the tariff cost to the Mexican consumers.
India believes that unilateral increases in MFN (most favoured nation) tariffs, without prior consultations, do not align with the spirit of our cooperative economic engagement or with the principles of predictability and transparency underpinning the multilateral trading system.
The official also said that the government is currently examining the details and implications of Mexico’s tariff revisions and remains engaged with all stakeholders to monitor the evolving situation.
Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said that Mexico's decision 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.
Domestic auto component manufacturers will face enhanced cost pressures with Mexico hiking duties on Indian imports, according to industry body ACMA.
India’s exports to Mexico stood at USD 5.75 billion in 2024-25, while imports were USD 2.9 billion.
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