Mexico has announced significant import tariff hikes ranging from 5% to 50% on over 1,400 items, fundamentally altering the commercial logic of accessing the Mexican market. These duties, set to take effect on January 1, 2026, target countries that do not have a Free Trade Agreement (FTA) with Mexico, including India, China, and South Korea. Analysts from the Global Trade Research Initiative (GTRI) estimate that these measures will affect nearly 75 percent of India’s $5.75 billion in annual exports to the country.
The automobile and steel sectors are expected to be hit the hardest. India’s largest export segment to Mexico—automobiles and components—will see duties rise from 20% to 35%, threatening the margins of major manufacturers like Bajaj Auto and Hero MotoCorp. Steel exports face even more “prohibitive” tariffs of up to 50% on flat products, which experts say could effectively close the Mexican market to Indian steel exporters. Additionally, smartphones, which previously entered Mexico duty-free, will now face a 35% tariff.
Experts believe Mexico is aligning its trade policy with the United States’ protectionist stance ahead of the USMCA (US-Mexico-Canada Agreement) review. By raising barriers against non-FTA nations, Mexico is signaling support for “near-shoring” and tighter North American supply chains. Indian trade bodies, such as FIEO, have expressed concern that these “steep duties” will erode competitiveness and risk disrupting supply chains, urging for the fast-tracking of a trade agreement.