Mexico hikes tariffs up to 50% on imports from China, India

Mexico’s Congress has approved a sweeping tariff overhaul that will raise duties on a broad range of imports from countries without a free-trade agreement, including India, China, South Korea, Thailand, Indonesia and other countries with which Mexico doesn’t have free trade agreements, in a move aimed at protecting domestic industry and advancing its strategic economic ties with the US.

The legislation, passed by the Mexican Senate on Wednesday with strong support in both chambers, will take effect on January 1, 2026, and imposes duties of up to 50 per cent on key products, including automobiles, auto parts, textiles, clothing, plastics and steel. Most items are expected to carry new or increased tariffs capped at around 35 per cent under the final version of the Bill.

For India, which does not have a free-trade pact with Mexico, the tariff changes are expected to hit several export segments. Indian machinery, automotive components, textiles, chemicals and plastics could face higher costs for Mexican importers, potentially weighing on demand.

New Delhi has not yet issued an official reaction, but trade analysts say the move may prompt Indian exporters to explore alternative markets or renegotiate commercial terms to offset the increased tariff burden. India’s trade with Mexico had grown robustly in recent years, with bilateral goods trade crossing the $10-billion mark and India posting a surplus in recent cycles.

India was Mexico’s ninth largest trading partner in 2024. The bilateral trade in 2024 consisted of Indian imports of $2.7 billion and exports of $8.9 billion to Mexico.

In the trade basket from Indian side, the most important items of export are automobiles and auto parts, pharmaceuticals, engineering goods and chemical products. From Mexican side, most important item is crude oil. Crude oil also occupies 75 per cent of export basket from Mexico. Other products of export to India are gold and related jewellery, chemical compounds and telephone machinery.

Beijing has criticised the decision as “protectionist” and called on Mexico to reconsider the unilateral action, highlighting broader trade tensions with Asia. The full international trade implications remain uncertain as affected countries, including India, weigh their diplomatic and commercial responses.