Impression of Mexico’s 50% Tariffs on India’s Auto Export Potential

The tariffs of as much as 50% authorised by Mexico’s Senate on Wednesday (December 10, 2025) on imports from Asian international locations, together with India, have been in place since April 2024 and won’t have a cloth impression on India’s general export image, an evaluation of commerce knowledge exhibits. Nonetheless, they may proceed to impression explicit sectors, equivalent to cars. 

As per the Senate’s choice, the tariffs are anticipated to use from April 1, 2026 onwards, and can apply to international locations with which Mexico doesn’t have a free commerce settlement, which incorporates India. Nonetheless, paperwork on the Mexican authorities’s web site present that these tariffs are usually not new.

In April 2024, the nation imposed tariffs starting from 5-50% on a spread of things imported from non-FTA companions for a interval of two years. The Senate’s transfer this December is an extension of that unique choice.

Sector-specific impression

India exported $5.7 billion value of products to Mexico in 2024-25, which works out to 1.3% of its complete exports that yr, displaying that at an mixture stage, larger tariffs wouldn’t pose a big menace to India’s general export state of affairs. 

Nonetheless, not solely are these exports dominated by a couple of sectors, Mexico is a significant recipient of these sectors’ exports, which suggests the tariffs might pose a danger to them. 

For instance, motor automobiles and their components made up $1.4 billion or 25% of India’s exports to Mexico. As well as, motorbike exports make up a further 7% of India’s exports to Mexico.

What locations these sectors at extra danger than others is that Mexico is among the largest markets for a number of of this stuff. For instance, Mexico accounts for about 10% of India’s complete auto and auto half exports. Mexico constitutes about 12% of India’s motorbike exports.

‘Begin FTA talks’

In response to the April 2024 tariffs and the next impression they had been having on commerce, the Engineering Exports Promotion Council (EEPC) wrote to Commerce Minister Piyush Goyal asking him to start talks with Mexico on a possible FTA.

“Given Mexico’s significance as a key export vacation spot for Indian engineering merchandise, our business members are deeply involved that these measures might erode their competitiveness within the Mexican market,” EEPC wrote in its November 2025 letter, accessed by The Hindu. 

“To handle this, the business strongly feels the necessity for a Free Commerce Settlement (FTA) or not less than a Preferential Commerce Settlement (PTA) between India and Mexico overlaying the affected sectors,” the letter added.

In line with EEPC, throughout April-October 2025, India’s complete engineering exports to Mexico noticed a decline of 12%. It added that, throughout this era, exports declined throughout varied sectors, together with a 7% discount in metal, a 26% drop in iron and metal merchandise, a 56% decline in aluminium and its merchandise, a 20% fall in auto parts, and a 32% lower in two and three-wheelers.