Mexico slaps steep tariffs on Asian imports; India among countries hit

Mexico has imposed steep new tariffs on a wide range of Asian imports, marking a significant departure from its traditionally pro-free-trade stance, and placing India among the key exporting nations affected.

Mexico’s Senate has approved a new tariff regime that raises duties, in some cases up to 50 per cent, on more than 1,400 products imported from countries without a formal free trade agreement (FTA) with Mexico, Reuters reported.

The targeted list includes China, India, South Korea, Thailand and Indonesia.

Mexico passes bill for higher import tariffs

The upper house passed the bill with 76 votes in favour, five against and 35 abstentions, brushing aside objections from domestic industry groups and strong protests from China. The lower house had already cleared the measure.

The tariff increases, which will come into force on January 1, 2026, will apply to a broad range of industrial inputs and consumer goods, including automobiles and components, textiles, clothing, plastics, metals and footwear.

While some items will face the maximum 50 per cent duty, most are expected to fall within the 35 per cent bracket.

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The legislation also grants Mexico’s economy ministry extensive powers to revise tariffs on non-FTA countries at its discretion, enabling rapid adjustments ahead of the USMCA review. This flexibility could lead to greater volatility in duty structures for Indian exporters.

India-Mexico trade relations to be hit

Mexico’s move to impose heavy tariffs on India is likely to disrupt bilateral trade. Mexico is India’s 31st largest trading partner, and commerce ministry data show bilateral trade reached USD 8.6 billion between April 2024 and March 2025, Bloomberg reported.

India currently enjoys a substantial trade surplus with Mexico. In 2024, Mexico’s main imports from India included motor vehicles, auto parts and other passenger vehicles. With the imposition of higher duties on these items, imports are expected to decline next year.

The revised duties will directly affect sectors where Indian companies have built a strong presence. Vehicles remain India’s largest export category to Mexico, including fully built models such as the Hyundai Creta, Kia Magnite, Volkswagen and Maruti Suzuki units, and Skoda vehicles.

Auto components form another major segment of India’s shipments. India’s commerce ministry has not yet issued a response.

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However, Mexican auto-sector groups strongly backed the tariff hike, warning that China’s rapid ascent poses a threat to domestic manufacturing. Under the new rules, Chinese car imports will face the steepest duty at 50 per cent.

Access to North American market curbed

For Indian exporters, the tariff shift may erode competitiveness in sectors such as textiles, leather goods, auto parts and steel, while prompting companies to reconsider supply chain routes through Mexico. Landed costs for Indian firms operating in or supplying to North American value chains via Mexico are also likely to rise.

India, which has sought to expand exports of textiles, auto components and engineering goods to Latin America, now faces a much tougher environment in Mexico — the region’s second-largest economy and a crucial gateway to North America.

Indian exporters have long used Mexico as a stepping stone into the US market, thanks to its integration into North American supply chains. The tariff increases threaten to diminish that strategic advantage.

Meanwhile, several Mexican manufacturers reliant on imports have warned that higher duties on goods from India and other Asian economies will push up production costs and fuel inflation, according to news agency reports.

Move to please Trump

The development comes as Mexican President Claudia Sheinbaum seeks to boost domestic production. However, analysts believe Mexico’s sudden protectionist shift is closely linked to pressure from the United States ahead of next year’s review of the USMCA (United States-Mexico-Canada Agreement).

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Sheinbaum government's latest move is widely seen as signalling alignment with Washington’s tougher stance on Chinese goods, in the hope that this may ease the sweeping US tariffs affecting Mexico’s own exports, such as steel and aluminium.

Although Sheinbaum denies that the tariffs are connected to US demands, the structure of the new duties mirrors American trade actions closely, Bloomberg noted.