Trade War Heats Up: Mexico Slams India with Up To 50% Tariffs
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This is a gut punch to Indian exporters, especially the auto sector. Mexico, under President Claudia Sheinbaum‘s government, just approved steep new tariffs—some as high as 50%—on hundreds of goods from countries it doesn’t have a free trade agreement with, which squarely includes India and China.
X happened (Mexico decided to protect its local jobs and manufacturing). And then Y followed (Indian cars and components got slammed with massive import duties).
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Who Gets Hit the Hardest?
The short answer is automakers. Mexico is not some marginal market; it is India’s third-largest car export market after Saudi Arabia and South Africa.
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The Impact: The hike—up to 50% in some cases, specifically on compact passenger cars—is expected to hit about $1.8 billion (roughly ₹14,940 crore) worth of Indian shipments.
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The Players: This directly affects major players like Volkswagen (VW’s Skoda Auto Volkswagen unit accounts for nearly 50% of India’s total car shipments to Mexico), Hyundai, Nissan, and Maruti Suzuki.
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The Lobbying Failure: Indian industry groups, like the Society of Indian Automobile Manufacturers, had reportedly lobbied hard, urging the Commerce Ministry to ask Mexico to keep the status quo. The fact that the tariffs were approved shows the lobbying effort failed, or nothing.
The Wider Blow to Indian Exports
The total goods India exported to Mexico in 2025 was $5.63 billion. Vehicles make up the largest chunk, but other sectors are also facing major trade turbulence:
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Vehicles (largest chunk): $1.86 billion
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Electrical, electronic equipment: $612.38 million
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Machinery, nuclear reactors, boilers: $560.87 million
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Organic chemicals: $388.04 million
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Aluminum: $386.03 million
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Pharmaceutical products: $211.20 million
The new tariff regime applies to over 1,400 products imported from countries without a formal trade agreement. While the move is largely seen as a geopolitical play aimed at China—and to placate the US ahead of the USMCA trade review—India is getting caught in the crossfire.
Piyush Arora, the chief of Skoda Auto Volkswagen India, summed it up before the tariffs were approved, saying Mexico has “consistently been one of our important export markets.” That stable market is now suddenly facing a 50% tax increase on Indian-made vehicles. This is an ongoing threat to India’s manufacturing export strategy.
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Disclaimer: This information is based on public announcements by the Mexican government and reports from Reuters; specific tariff rates should be verified with the official Mexican Gazette once published.
