New Delhi: After US tariffs, India now faces taxes on its exports to Mexico.
In a significant shift in policy, Mexico is set to move away from its pro-free-trade approach after the country’s Senate approved a new tariff regime that will raise duties, in some cases up to 50%, on more than 1,400 products imported from countries that don’t have a formal trade agreement with Mexico, Reuters reported.
The targeted nations include India, besides other Asian countries like China, South Korea, Thailand and Indonesia.
The upper house cleared the proposed bill with 76 votes backing it, 5 against and 35 abstentions. The lower house had already approved the bill, despite protests from domestic industry bodies and strong objections from China.
The tariffs, to be implemented from 2026, will apply to a wide range of industrial inputs and consumer goods, including automobiles and parts, textiles, apparel, plastics, metals and footwear. The maximum 50 per cent duty will be slapped on certain select, while most goods are expected to fall under the 35 per cent bracket.
How India will be affected
Mexico, the second-largest economy in the region, has long been leveraged by Indian exporters as a stepping stone to the US.
That ‘tactic’ may now be hampered even as India is seeking to boost exports of textiles, auto components and engineering goods to Latin America.
Analysts believe Mexico’s sudden protectionist policy is linked to pressure from the Donald Trump administration ahead of next year’s USMCA (United States-Mexico-Canada Agreement) review.
Mexican President Claudia Sheinbaum’s government is clearly moving toward aligning with Trump’s tough stance in the hope that it will help ease sweeping US tariffs that have hit Mexico’s own exports such as steel and aluminium.
For Indian exporters, the new Mexican tariffs could reduce competitiveness in textiles, leather goods, auto parts and steel industries.
It is also expected to increase landed costs for Indian firms operating in or supplying to North American value chains via Mexico.
A response from India’s Commerce Ministry is awaited.
