Mexico’s decision to hike tariffs on imports from India by up to 50% will impact 75% of the $5.75 billion worth shipments to the country, according to an analysis by Global Trade Research Initiative (GTRI).
Automobiles and Auto Components Face Severe Price Erosion
Automobiles and auto components, India’s largest export segment to Mexico, will be among the worst affected. Passenger vehicles, with exports of $938.35 million in FY25, face a tariff increase from 20% to 35%, sharply eroding price competitiveness in a market increasingly shaped by US Mexico Canada (USMCA) sourcing rules.
The impact is even more severe for auto components, which accounted for $507.26 million in exports. Tariffs on them is up from 10–15% to 35%, disrupting India’s deep integration into Mexico-based automotive supply chains which serves the US market.
Motorcycles, another Indian stronghold with exports of $390.25 million, will see duties increase from 20% to 35%, threatening volumes, margins and brand presence for manufacturers such as Bajaj Auto, TVS Motor and Hero MotoCorp, GTRI said.
The higher duties will take effect from January 1, 2026 onwards. Under the decision, Mexico will impose steep import tariffs — ranging from about 5% to 50% — on goods from countries which do not have free-trade agreements with Mexico, including India, China, South Korea, Thailand and Indonesia.
Mexico is recalibrating its trade stance early to avoid friction with the US and strengthen its negotiating position during the upcoming USMCA discussions, GTRI founder Ajay Srivastava wrote.
Tariffs on Tech, Metals, and others
Smartphones, which recorded $284.53 million in exports to Mexico in FY25, earlier entered the country duty-free (0%). From January 2026, they will face a 35% tariff, effectively shutting the Mexican market for Indian handset exporters.
Industrial machinery, India’s second-largest export category to Mexico at $547.99 million, will see duties rise from 5–10% to 25–35%. In metals, the tariff shock is particularly punitive. Aluminium exports worth $383.28 million face duties increasing from 5–10% to 25–35%. Iron and steel exports of $128.44 million are hit hardest: tariffs rise from 10–15% to 35% on long products and a prohibitive 50% on flat products. Articles of iron or steel, valued at $176.87 million, see duties jump from 15% to 35%.
Garments and made-ups, with exports of $245.90 million, face tariffs rising from 20–25% to 35%. Textiles exports of $149.94 million see duties increase from 10–15% to 25%, while ceramic products, valued at $94.12 million, move from 10–15% to 25–35%.
Pharmaceuticals sector had exports of $197.48 million in FY25 to Mexico and there tariffs remain broadly unchanged, moving only marginally from 0–5% to 0–10%.Coffee, tea and spices, valued at $36.45 million, face tariffs rising from 0–5% to 15%. While other affected countries have protested, India is unlikely to retaliate as its imports from Mexico at $ 2.9 billion are half of its exports, limiting leverage, GTRI added.