- Mexico’s new 5-50% tariffs will affect nearly 75% of India’s exports.
- Key sectors such as autos, smartphones, steel, and textiles face major duty hikes.
- Pharma largely unaffected; India likely to diversify exports instead of retaliating.
Mexico’s substantial rise in tariffs on imports from nations lacking a free-trade agreement will greatly impact India’s exports starting January 1, 2026, according to the Global Trade Research Initiative (GTRI), which cautioned that almost 75% of outbound shipments will face significantly increased duties, ANI reported.
Mexico has opted to implement tariffs of as much as 50% on products from non-FTA countries, a decision that GTRI estimates will impact approximately 75% of India’s $5.75 billion in exports. “Nearly 75% of India’s $5.75 billion exports to Mexico will be affected as tariffs jump from 0-15% to around 35%,” the think-tank said.
With the new framework, Mexico will impose tariffs between 5% and 50%. Automobiles and auto parts - India’s main export sectors to Mexico - will face significant impacts. Passenger cars valued at $938.35 million will experience duty increases from 20% to 35%, whereas auto parts worth $507.26 million will see a rise from 10-15% to 35%. Motorcycle exports worth $390.25 million will incur a 35% duty, ANI reported.
Smartphones that currently enter duty-free will incur a 35% tariff, a step GTRI claims will “essentially close” the Mexican market. Steel exports, especially flat products, will face a staggering 50% tariff, likely excluding Indian shipments altogether.
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Industrial machinery valued at $547.99 million will have tariffs increased to 25-35%, significantly elevating landed expenses. Garments and made-ups totaling $245.90 million will experience duty increases from 20-25% to 35%, textiles will rise from 10-15% to 25%, and ceramics will increase to 25-35%, greatly diminishing India’s price competitiveness. Pharmaceuticals, on the other hand, will remain mostly unaffected, as duties shift from 0-5% to 0-10%, ensuring that India’s generics remain competitive.
Even with the significant effect, India is unlikely to respond since imports from Mexico amount to only $2.9 billion, which restricts leverage. Rather, New Delhi is anticipated to concentrate on diversifying exports in light of what GTRI refers to as the quickening decline of global trade regulations.