 "India in talks with Mexico over tariff hike, explores free trade pact to protect exporters")
India is in talks with Mexico over its unilateral decision to raise tariffs on a range of products, seeking mutually beneficial solutions while reserving the right to take appropriate steps to protect the interests of Indian exporters, news agency PTI reported on Saturday.
The higher duties apply to countries that do not have free trade agreements with Mexico, including India, China, South Korea, Thailand and Indonesia.
The official said to PTI that India had engaged with Mexico even at the stage when the proposal was first introduced.
Earlier, the Indian Embassy in Mexico raised the issue with the Ministry of Economy on September 30, 2025, seeking special concessions to shield Indian exports from the proposed tariff hike.
“India 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,” the official added.
Free trade agreement talks on the table
India and Mexico are also exploring the possibility of launching negotiations for a free trade agreement, with the terms of reference to formally begin talks expected to be finalised soon. Experts believe such an agreement could help insulate Indian exporters from the new tariffs, which were imposed amid US pressure on Mexico to align with higher tariffs on China and curb trans-shipment to the US.
Details of Mexico’s tariff decision
Mexico’s Senate approved the tariff measure on December 11, 2025, and it has since been cleared by both chambers of Congress. The move is aimed at boosting domestic manufacturing and reducing trade imbalances.
Under the decision, Mexico will impose import duties ranging from around 5 percent to as high as 50 percent on about 1,463 tariff lines covering goods from countries without free trade agreements. The final list of affected products is yet to be officially notified. The higher tariffs will take effect from January 1, 2026.
Ongoing dialogue and high-level talks
“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.
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View AllA high-level meeting has already taken place between Commerce Secretary Rajesh Agrawal and Mexico’s Vice Minister of Economy Luis Rosendo, with follow-up technical discussions 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.
Concerns over impact on exports
The official noted that the actual impact on Indian exports would depend on the importance of Indian goods to Mexico’s domestic supply chains, as well as exporters’ ability to secure exemptions or pass on the additional costs to consumers.
India has also conveyed that unilateral increases in most favoured nation tariffs without prior consultation do not align with the spirit of cooperative economic engagement or the principles of predictability and transparency underpinning the multilateral trading system.
Industry flags risks
The government said it is closely examining the implications of Mexico’s tariff changes and remains in touch with stakeholders to monitor developments.
Federation of Indian Export Organisations Director General Ajay Sahai said the move is a cause for concern, especially for sectors such as 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 the decision underlines the need for India and Mexico to fast-track a comprehensive trade agreement.
Industry body ACMA also warned that domestic auto component manufacturers are likely to face higher cost pressures due to the increased duties.
India’s exports to Mexico stood at USD 5.75 billion in 2024–25, while imports from Mexico were valued at USD 2.9 billion.
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