Mexico’s decision to sharply raise import tariffs on over 1,400 products from select non-FTA countries starting 2026 is set to hurt nearly three-fourths of India’s $5.75 billion exports to the country, with duties rising to 25–35 per cent for most items and as high as 50 per cent for some, experts said.
According to a report by the Global Trade Research Initiative (GTRI), automobiles and auto components — India’s largest export segment to Mexico — will be among the worst affected. Passenger vehicle exports worth $938.35 million in FY25 will face a tariff hike from 20 per cent to 35 per cent, while auto components exports of $507.26 million will see duties jump sharply from 10–15 per cent to 35 per cent, disrupting India’s role in Mexico-based supply chains linked to the US market.
Motorcycle exports, another key Indian strength with shipments of $390.25 million in FY25, will also face a tariff increase from 20 per cent to 35 per cent, threatening volumes, margins and brand presence for companies such as Bajaj Auto, TVS Motor and Hero MotoCorp.
Steel exports from India are expected to be hit the hardest, with tariffs rising to 50 per cent, potentially pricing Indian flat steel products out of the Mexican market. Labour-intensive sectors such as garments, textiles and ceramics will see tariffs climb to 25–35 per cent, posing a major challenge for MSME exporters.
Other industrial goods including machinery, aluminium, plastics and chemicals will also face sharp duty hikes, eroding India’s price competitiveness across a wide range of products. Electronics exports are set to take a significant hit as well. Smartphones, which saw exports of $284.53 million to Mexico in FY25 and previously entered duty-free, will face a 35 per cent tariff from January, a move that could effectively shut the market for Indian handset makers.
GTRI noted that Mexico’s move appears aligned with recent US protectionist policies ahead of the scheduled review of the US-Mexico-Canada Agreement (USMCA). By raising tariffs on imports from non-FTA countries such as India and China, Mexico is signalling a push towards near-shoring and strengthening North American supply chains in line with US priorities.
