Trade impact: Mexico’s tariff hike to hit 75% of India’s exports; duties to rise up to 50% from Jan 2026

Mexico’s steep tariff increase on imports from countries without a free-trade agreement will significantly disrupt India’s exports from January 1, 2026, the Global Trade Research Initiative (GTRI) has said, warning that nearly three-quarters of outbound shipments will come under sharply higher duties, ANI reported.

Mexico has decided to impose duties of up to 50% on goods from non-FTA partners, a move that GTRI estimates will affect around 75% of India’s $5.75 billion exports. “Nearly 75% of India’s $5.75 billion exports to Mexico will be affected as tariffs jump from 0-15% to around 35%,” the think-tank said.


Under the revised structure, Mexico will levy tariffs ranging from 5% to 50%. Automobiles and auto components — India’s largest export categories to Mexico — will be among the hardest hit. Passenger vehicles worth $938.35 million will see duties rise from 20% to 35%, while auto components worth $507.26 million will face an increase from 10-15% to 35%. Motorcycle exports of $390.25 million will also attract 35% duty, ANI said.

Smartphones, which currently enter duty-free, will face a 35% tariff, a move GTRI says will “effectively shut” the Mexican market. Steel exports — particularly flat products — will confront a prohibitive 50% duty, likely pricing Indian shipments out entirely. Industrial machinery worth $547.99 million will see levies rise to 25-35%, substantially raising landed costs.

Garments and made-ups worth $245.90 million will see duties rise from 20-25% to 35%, textiles from 10-15% to 25%, and ceramics to 25-35%, sharply eroding India’s price competitiveness. Pharmaceuticals, however, will be “largely unaffected,” with duties moving only from 0-5% to 0-10%, keeping India’s generics competitive.

GTRI said Mexico’s move signals alignment with US trade priorities. “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,” the report noted.

Despite the sweeping impact, India is unlikely to retaliate as imports from Mexico total just $2.9 billion, limiting leverage. Instead, New Delhi is expected to focus on export diversification amid what GTRI describes as the “accelerating erosion” of global trade rules.


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