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India and Mexico are looking to start negotiations for a free trade agreement as the latter hiked tariffs on Indian goods to 50%, which is expected to impact auto exports.
Mexico announced tariffs on countries it does not a trade deal with, including India. (Reuters/File)
After Mexico unilaterally imposed 50% tariffs on Indian goods, mirroring a similar move by the United States, India has cautioned that it may take appropriate steps to protect the interests of its exporters, according to an official.
Earlier this week, Mexico approved a new tariff regime that raises import duties on goods coming from countries with which it does not have a free trade agreement (FTA), including India, China, South Korea, Thailand and Indonesia. The Senate cleared the measures for implementation from January 1, 2026.
An official told news agency PTI that India is engaged with Mexico to find mutually beneficial solutions after its decision to raise tariffs, even though New Delhi reserves the right to take appropriate measures to safeguard the interests of its exporters.
“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.
India-Mexico FTA Soon?
The Embassy of India in Mexico also raised the issue with Mexico’s Ministry of Economy on September 30, 2025, itself, seeking special concessions to shield Indian exports from the new tariffs. “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.
Furthermore, both 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. This is expected to help insulate Indian companies from these tariffs.
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 told PTI, adding that the actual impact of these tariffs 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.
Why Has Mexico Imposed Tariffs?
Mexico’s tariffs came after the Trump administration warned about low-priced Chinese goods entering the US through Mexican channels. Mexico has also framed the tariff increase as a step to protect domestic industry and employment and as a way to correct distortions caused by cheap imports.
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,” he said.
India exported goods worth $8.9 billion to Mexico in 2024, while imports stood at $2.9 billion.
(with agency inputs)
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