Team siliconindia

• Mexico will increase tariffs on Asian imports from 2026, covering over 1,400 products.
• Indian auto and aluminum exports are expected to be the most affected, given their large share in trade with Mexico.
• The move may be tied to USMCA trade concerns, as Mexico looks to tighten trade routes to the US.

India’s exports to Mexico could come under pressure after the country approved a major tariff hike on imports from nations without a free trade agreement, according to a report. The move is expected to weigh most heavily on automobiles, auto components, and aluminum shipped from India.

Last week, Mexico passed a bill to increase tariffs on more than 1,400 imported products from Asian countries, with the new rates set to take effect on January 1, 2026. The revised duties will range from 5% to as high as 50%, with most goods facing tariffs of up to 35 percent. The legislation was approved by a strong majority in Mexico’s Congress.

JM Financial said the tariff hike could affect a broad set of Indian exports, including autos, auto parts, steel, aluminum, textiles, plastics, electronics, and machinery. In FY25, India exported goods worth $5.7 billion to Mexico, making it the country’s 21st largest export market and accounting for 1.3 percent of India’s total exports.

Auto and auto components form the largest share of India’s exports to Mexico at 33.8 percent, followed by electronics (12 percent), machinery (9.5 percent), organic chemicals (6.8 percent), aluminum (6.7 percent), and iron and steel (5.3 percent). Among these, auto products and aluminum are expected to face the greatest impact. Mexico is the second-largest market for Indian auto exports and the fourth-largest destination for Indian aluminum.

Also Read: Mexico Enacts Up to 50 Percent Tariff Rise on Key Imports from India, China

Report noted that the move may be linked to pressure from the United States, Mexico’s biggest trading partner, ahead of the USMCA trade agreement review in 2026. Some exporters have reportedly routed goods through Mexico to bypass US tariffs, and the new measures could aim to limit such practices.

Industry concerns are already visible. In November, the Society of Indian Automobile Manufacturers (SIAM) urged India’s commerce ministry to ask Mexico to maintain current tariff levels for Indian vehicles. Most Indian shipments to Mexico are small-engine cars, which account for just 6.7 percent of Mexico’s annual vehicle sales.