Mexico has announced steep import duties of up to 50 percent on a wide range of products from Asian countries, including India and China, just months after the United States imposed similar tariff levels on Indian exports. The new Mexican tariffs are scheduled to take effect from January 1, 2026.
The move is aimed at shielding domestic industries and local producers from cheaper imports. According to Mexican media reports, the affected products include auto components, passenger vehicles, apparel, plastics, steel, household appliances, toys, textiles, furniture, footwear, leather products, paper and cardboard items, motorcycles, aluminium, trailers, glassware, soaps, perfumes, and cosmetics.
Countries without formal trade agreements with Mexico—such as India, China, South Korea, Thailand, and Indonesia—will bear the brunt of these duties.
Why Mexico Is Raising Tariffs
The Mexican government is attempting to reduce its dependence on imports from Asian economies, particularly China, with which it runs a significant trade deficit. China alone accounted for nearly $130 billion worth of Mexican imports in 2024, making it the most affected nation under the new tariff regime.
The proposed tariffs are expected to generate an additional $3.8 billion (approximately ₹33,900 crore) in government revenue. President Claudia Sheinbaum has emphasized that the policy is designed to strengthen local manufacturing and boost domestic production.
Morena party leader and Deputy Ricardo Monreal stated that supporting Mexican industry is essential for job creation and long-term economic stability.
However, some analysts believe the decision may also be politically motivated, intended to align Mexico more closely with U.S. trade expectations ahead of the upcoming United States–Mexico–Canada Agreement (USMCA) review.
China has criticized the move, reiterating its opposition to unilateral tariff increases and urging Mexico to reverse what it called protectionist measures.
Impact on India’s Exports
India is expected to face a significant setback, particularly in the automobile sector. The new tariffs could affect nearly $1 billion worth of Indian vehicle exports to Mexico, according to industry estimates.
Major car manufacturers such as Volkswagen, Hyundai, Nissan, and Maruti Suzuki are likely to be hit hard. Import duties on passenger vehicles will reportedly rise from 20% to 50%, sharply reducing price competitiveness.
Industry representatives have already urged the Indian government to engage diplomatically with Mexican authorities to mitigate the impact. In a letter sent to the commerce ministry before the tariffs were finalized, industry bodies warned that the hike would directly hurt Indian automobile exports.
Mexico currently ranks as India’s third-largest car export destination, following South Africa and Saudi Arabia, making the policy shift a notable blow to India’s automotive trade prospects.
