Mexico’s tariffs to hit India’s electronics, auto, auto components & metal exports, say experts

New Delhi: Mexico’s decision to sharply increase import tariffs is set to significantly impact India’s exports of automobiles, auto components, electronics, metals and chemicals, experts warned. The move affects nearly three-fourths of India’s $5.75 billion exports to Mexico in FY25, fundamentally reshaping the commercial viability of the market.

Mexico’s Senate approved the tariff hike on December 11, 2025, with both chambers of Congress clearing it soon after. The higher duties, ranging from 5 per cent to 50 per cent on imports from countries without free trade agreements—including India, China, South Korea, Thailand and Indonesia—will take effect from January 1, 2026.

According to think tank GTRI, automobiles and auto components, India’s largest export category to Mexico, will be hit hardest. Passenger vehicle exports worth $938.35 million face duty increases from 20 per cent to 35 per cent, while auto component shipments of $507.26 million will see tariffs jump from 10–15 per cent to 35 per cent, disrupting established supply chains linked to the US market. Motorcycle exports of $390.25 million will also face a rise from 20 per cent to 35 per cent.

FIEO Director General Ajay Sahai said the steep duties could erode India’s competitiveness across automobiles, electronics, machinery, chemicals, pharmaceuticals, textiles and plastics, stressing the need for India and Mexico to expedite a comprehensive trade agreement.

Electronics and machinery exports will also suffer. Smartphones, which previously entered duty-free and accounted for $284.53 million in exports, will now attract a 35 per cent tariff, effectively closing the market to Indian handsets. Industrial machinery exports worth $547.99 million will face duties of 25–35 per cent, up from 5–10 per cent.

Metals, textiles and labour-intensive sectors face similar setbacks. Aluminium exports of $383.28 million will see tariffs rise to 25–35 per cent, while iron and steel shipments worth $128.44 million face some of the steepest increases. Garments, made-ups, chemicals, plastics and spices will also be affected.

GTRI noted that Mexico has become the second major economy after the US to openly breach WTO tariff commitments, undermining the most-favoured-nation principle. India’s imports from Mexico stand at $2.9 billion—roughly half its export value.