India in talks with Mexico on unilateral tariffs, trying to find a mutually agreed solution
India and Mexico are negotiating increased import duties on several products. India has indicated it will protect the interests of exporters. These duties will take effect from January 1, 2026, and could affect several sectors.
Following the United States, Mexico has also imposed a 50 percent tariff on India, a measure India is negotiating with Mexico to resolve. Mexico has announced unilateral tariffs not only on India but also on several Asian countries.
These tariffs have been imposed against countries that do not have free trade agreements with Mexico, including India, China, South Korea, Thailand, and Indonesia.
According to an ET report, India values its partnership with Mexico and is ready to work together towards a stable and balanced trade environment that benefits businesses and consumers in both countries.
Furthermore, the two countries are seeking to commence negotiations for a free trade agreement, and the terms of reference for the start of formal negotiations are expected to be finalized soon.
Experts say this trade agreement will help protect Indian companies from tariffs that were imposed under US pressure to increase tariffs against China and restrict the flow of goods to the US.
On December 11, 2025, the Mexican Senate approved a new tariff measure, which was later passed by both houses of Congress. Its purpose is to boost manufacturing and reduce the trade deficit.
Under this decision, Mexico will impose heavy import duties (approximately 1,463 tariff items) on goods coming from countries with which Mexico does not have a free trade agreement. These duties can range from approximately 5 percent to 50 percent.
When will the rates be applicable?
However, the list of items included has not yet been officially released. These increased duties will take effect on January 1, 2026. An official said that the Commerce Department is working closely with the Mexican Ministry of Economy to find a mutually beneficial solution, in accordance with global trade rules.
A high-level meeting has already taken place between Commerce Secretary Rajesh Aggarwal and Mexico's Deputy Economy Minister Luis Rosendo, and technical-level meetings are expected soon.
Ajay Sahai, Director General of the Federation of Indian Export Organizations (FIEO), said that Mexico's decision is a matter of concern, especially for sectors such as automobiles and auto components, machinery, electrical and electronics, organic chemicals, pharmaceuticals, textiles, and plastics.
Sahai said that such high tariffs will weaken our competitiveness and threaten to damage supply chains that have taken years to develop.
He further stated that this situation highlights the need to quickly conclude a comprehensive trade agreement between India and Mexico.
According to industry body ACMA, Mexico's increased tariffs on Indian imports will increase cost pressures on domestic auto parts manufacturers. India's exports to Mexico in 2024-25 were US$5.75 billion, while imports were US$2.9 billion.