Post by : Meena Ariff

In a significant policy shift, Mexico has approved new tariffs on a wide range of imported goods from nations without trade agreements, notably including India and China. This move, revealed by President Claudia Sheinbaum, is designed to safeguard local employment and enhance domestic production capabilities.

Indian automotive manufacturers brace for impact, as Mexico ranks as India's third-largest car export destination, following South Africa and Saudi Arabia. The approved tariff structure, greenlit by the Mexican Senate, could see tax rates soar to 50% on upwards of 1,400 items.

Major players in the Indian automotive industry, such as Volkswagen, Hyundai, Nissan, and Suzuki, stand to see their shipments worth $1.8 billion (approximately ₹14,940 crore) affected. Representatives from the industry are actively advocating to mitigate the imposition of these tariffs.

In 2025, exports from India to Mexico totaled $5.63 billion (₹5,085 crore), largely driven by automobiles. Other sectors that will be impacted include electrical and electronic equipment ($612.38 million), machinery and boilers ($560.87 million), organic chemicals ($388.04 million), aluminum ($386.03 million), and pharmaceuticals ($211.20 million).

Piyush Arora, head of Skoda Auto Volkswagen India, pointed out the crucial role Mexico plays as an export hub, noting the growing popularity of India-manufactured models, with Skoda responsible for nearly half of all Indian car exports to Mexico.

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