India in talks with Mexico for a preferential trade agreement

New Delhi [India], December 15 : India and Mexico initiated discussions to promptly mitigate the impact of tariffs imposed on Indian goods by Mexico and to chart ways and means to protect trade interests.
Mexico has approved tariff hikes of up to 50 per cent from 2026 on imports of select products from Asian countries, including India and China, to protect the national industry and producers.
Citing support for local production and the correction of trade imbalances, Mexico has approved an increase in MFN import tariffs (5-50 per cent) starting in 2026 on 1,455 tariff lines under the WTO framework, targeting non-FTA partners.
According to India, preliminary estimates suggest that this affects around USD 2 billion exports to Mexico -- particularly automobiles, two-wheelers, auto parts, textiles, iron and steel, plastics, leather and footwear, etc.
First proposed in September 2025, the proposal was deferred to August 2026 after concerns from non-FTA partners and industry. The proposal was resubmitted on December 3, 2025, and got clearance from both houses of Parliament. The proposal now awaits Presidential Gazette notification this week.
India-Mexico merchandise trade totalled USD 8.74 billion in 2024 (DGCI&S), with exports of USD 5.73 billion, imports of USD 3.01 billion, and a trade surplus of USD 2.72 billion.
Key exports include light vehicles (USD 0.88 billion), motorcycles (USD 0.39 billion), base metals (USD 0.76 billion), auto parts (USD 0.74 billion), mechanical machinery (USD 0.46 billion), textiles/clothing (USD 0.41 billion), chemicals (USD 0.43 billion), pharmaceuticals (USD 0.38 billion); key imports are crude petroleum oils (USD 1.7 billion), smartphones (USD 0.27 billion), and gold (USD 0.17 billion).
The Indian government has been continuously and comprehensively assessing Mexico's tariff revisions since the issue emerged, engaging stakeholders, safeguarding the interests of Indian exporters, and pursuing constructive dialogue with Mexico to ensure a stable trade environment benefiting businesses and consumers in both countries, the government said on Monday, while releasing the trade data for November.
The Embassy of India had raised immediate concerns with Mexico's Ministry of Economy in late September, which clarified that the measure is not directed against India and reaffirmed its commitment to the bilateral relationship.
"Through continuous engagement thereafter, a virtual meeting between Commerce Secretary Shri Rajesh Agrawal and Vice Minister Dr. Luis Rosendo was held on 2 December 2025, agreeing to pursue a trade agreement to mitigate the impact promptly, with technical discussions initiated from 12 December 2025," India's Commerce Secretary Rajesh Agrawal said in a presentation.
According to a report by the Global Trade Research Initiative (GTRI), Mexico's decision to sharply raise import duties on goods from countries without a free-trade agreement will significantly disrupt India's exports beginning January 1, 2026. GTRI states that Mexico's action is aligned with U.S. trade priorities. The report notes, "Mexico's move is seen as aligning its trade policy more closely with recent U.S. protectionist measures... signalling support for near-shoring and tighter North American supply chains"