Accelerated commerce talks between Mexico and India might be on the horizon after steep new tariffs that may hit India particularly onerous have been authorized by each homes of the Mexican Congress.
The brand new tariffs, meant to strengthen Mexican manufacturing and scale back commerce imbalances, are aimed toward nations with out free commerce agreements with Mexico. Moreover India, these nations embody China, South Korea, Thailand and Indonesia.
Tariff bundle on Asian imports will shield 350,000 jobs: Monday’s mañanera recapped
Regardless of attracting criticism from enterprise teams, Mexico’s authorities expects the tariffs to bolster native trade and shield employment.
The brand new tariffs might be as excessive as 50% and have been mentioned to be launched to appease america forward of the evaluation of a regional commerce settlement, the USMCA, in 2026.
“Such steep duties will erode our competitiveness and danger disrupting provide chains which have taken years to develop,” the Federation of Indian Export Organisations’ Director Basic Ajay Sahai said.
The upper duties will take impact on Jan. 1, 2026.
In response, India is pushing for a free commerce settlement to keep away from round US $2 billion value of Indian exports being topic to the brand new tariffs, Rajesh Agrawal, India’s commerce secretary, mentioned on Monday.
“Mexico’s major goal is to not hit Indian exports,” Agrawal mentioned. “India has engaged with Mexico to pursue a commerce settlement to mitigate the impression promptly.”
In line with Agrawal, Mexico and India have had preliminary technical discussions on such a deal following an internet assembly between Agrawal and Mexico’s Deputy Minister Luis Rosendo this month.
In 2024, India exported $5.73 billion of products to Mexico, whereas Mexico exported $3.01 billion of merchandise to India. Key exports included autos, base metals, auto components and textiles.
The impression of auto sector tariffs
Mexico’s new tariffs are anticipated to be particularly detrimental to India’s auto sector, which exports round $1 billion value of shipments to Mexico annually, with the import obligation on automobiles anticipated to climb from 20% to 50%.
In November, the Society of Indian Car Producers trade group known as for India’s Commerce Ministry to encourage Mexico to “keep established order” on tariffs for autos shipped from India to its third-largest automobile export market, in response to a letter from an trade group reviewed by Reuters.
“Indian-origin autos aren’t a menace to Mexican native trade as Indian autos don’t cater to high-end segments manufactured by Mexico for serving the North American market,” the trade group mentioned in its letter.
With experiences from Reuters and The Financial Occasions
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