India engages Mexico over up to 50% tariff hike, raises MFN concerns

India has formally raised strong objections to Mexico’s recent decision to dramatically increase import tariffs on a wide range of products, while signalling that New Delhi reserves the right to take "appropriate measures" to protect Indian exporters, as per a PTI report. 

The new duties, which target imports from countries without Free Trade Agreements (FTAs) with Mexico — including India, China, South Korea, Thailand, and Indonesia — were approved by both chambers of the Mexican Congress on December 11, 2025, and are set to take effect on January 1, 2026. 

Under the measure, Mexico will impose import tariffs ranging from approximately 5% to as high as 50% across roughly 1,463 tariff lines. While the official list of affected items is pending notification, the move is broadly aimed at boosting Mexico's domestic manufacturing and reducing trade imbalances. 

Indian exporters have raised alarms, particularly in sectors such as automobiles and auto components, machinery, electrical and electronics, organic chemicals, pharmaceuticals, textiles, and plastics. 

A government official confirmed that India has been engaged with Mexico since the bill's initial tabling, as per the PTI report. The Embassy of India in Mexico formally raised the issue with Mexico’s Ministry of Economy on September 30, 2025, seeking special concessions to shield Indian exports.

Commerce Secretary Rajesh Agrawal and Mexico’s Vice Minister of Economy Luis Rosendo have already held a high-level meeting, with technical follow-on meetings expected soon. 

Despite ongoing dialogue, India has flagged concerns over the unilateral nature of the announcement. The official noted that increasing Most Favored Nation (MFN) tariffs without prior consultation is inconsistent with the spirit of cooperative economic engagement and the principles of predictability and transparency central to the multilateral trading system. 

India's exports to Mexico were valued at $5.75 billion in 2024-25, compared to imports from Mexico at $2.9 billion. 

Meanwhile, both nations are reportedly moving to initiate negotiations for a Free Trade Agreement (FTA), which experts believe is the best long-term solution to insulate Indian businesses from future tariff changes. Analysts suggest Mexico's decision may also be influenced by pressure from the United States to align with a broader global push to raise tariffs on China.