Mexico's New Tariffs: India's Exports to Drop 25-40%, Auto Sector Faces 50% Duty

• Mexico approved a new tariff regime (5-50%) on goods from non-FTA countries like India and China, effective January 1, 2026.
• The tariffs aim to protect Mexico's domestic industries from cheap imports, particularly from China, and address US concerns about goods entering via Mexico.
• Indian exports, valued at $8.9 billion in 2024, face significant impact, with automobiles seeing tariffs rise to 50% from 20%.
• Other affected Indian sectors include auto components, steel, textiles, and pharmaceuticals, potentially leading to a 25-40% decline in India's exports to Mexico.
• India is exploring a free trade agreement or partial scope arrangement with Mexico to mitigate the impact of the new duties.

Why It Matters: Mexico's new tariffs will drastically reduce India's exports, especially automobiles.