Ever since the United States began imposing tariffs on India and several other countries, global markets have been experiencing constant turbulence.
Now Mexico has stepped into the same direction, approving a major decision to levy steep tariffs on goods coming from India, China, and several other Asian nations. The Mexican Senate has passed the proposal, and the increased duties will come into effect from 2026.
These tariffs will hit hardest those countries that do not have a trade agreement with Mexico including major economies such as China, India, South Korea, Thailand, and Indonesia.
Which products will face the new tariffs?
Under the new rules, Mexico will impose tariffs of up to 50 per cent on major categories such as automobiles, auto parts, textiles, clothing, plastics, and steel. Many other goods will also see duties increased to around 35 percent. According to the Mexican government, these higher tariffs are necessary to protect local industries that have been struggling against a surge of cheaper imports.
The new tariffs will apply mainly to countries that do not have a free trade agreement (FTA) with Mexico, which means China and several South Asian nations will be directly affected. Although the proposal passed by the Senate is softer than the original draft initially, Mexico planned to raise tariffs on almost 1,400 product lines the revised plan still increases costs on about two-thirds of them. Even with these adjustments, the higher import expenses are seen as a major blow for global traders.
Mexico's tariff move is likely to reshape export strategies across Asia and trigger fresh tremors in global supply chains. All eyes are now on how the United States responds to this development during the upcoming review of the USMCA (United States Mexico Canada Agreement).
Will the new tariffs hurt India?
Mexico's tariff hike is expected to have more advantages than disadvantages for India. In fact, this move could open new doors for Indian exporters as global companies look for alternative suppliers. With Mexico trying to reduce its dependency on China, Indian firms could step in and capture a bigger share of the market. This shift may also reflect positively on the Indian stock market, especially for export-driven sectors.
Companies in several industries could benefit if Mexico begins sourcing more from India. For example:
- Textiles: Gokaldas, KPR Mill, Vardhman
- Auto parts: Motherson, Bharat Forge, Sona BLW
- Footwear: Bata, Relaxo (if orders increase)
- Plastics: Astral, Supreme Industries
Mexico's decision also strengthens the global "China Plus One" trend, which encourages diversifying supply chains beyond China. This theme is already strong in India, and Mexico's tariffs may accelerate it further, likely boosting investor interest in multiple sectors.
Industries such as Electronics Manufacturing Services (EMS) including Dixon, Amber and Kaynes along with auto components, chemicals, and industrial capital goods, may witness increased investment. If India also cuts back on imports from China and pushes local manufacturing, demand for steel, mining, and engineering products could rise as well.
India Mexico Trade
India and Mexico share a solid trade relationship. While official trade numbers for 2025 are not yet available, in 2024 the total bilateral trade stood at USD 11.71 billion. Out of this, India exported goods worth US$5.63 billion and imported goods worth USD 8.98 billion from Mexico.
India mainly exports auto parts, vehicles, engineering goods, chemicals, and pharmaceuticals to Mexico. If tariff rates rise on these items, the companies manufacturing these products may feel some pressure, but overall, India is better positioned to gain than lose from Mexico's new tariff framework.
source: India.com
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