New Delhi. Mexico’s decision to increase import duty on many products by 50 percent has become a big concern for Indian exporters. Indian companies say that due to this increase, many products going from India to Mexico may lag behind in competition, especially the companies related to automobile, auto parts and steel are afraid of huge losses. Exporters want the Indian government to quickly sign a free trade agreement with Mexico, but it is being said that Mexico is not ready to talk on this issue. If this is really so, then it can be understood that Mexico might be doing this due to American pressure. Remember that the trade deal between America and India has not been completed yet. It has imposed tariffs on India for buying Russian oil. America also has a fear about coming closer to India, Russia and China.
Mexico had also increased the fee in April 2024
Even in April 2024, Mexico had increased the duty on these same products by 5 to 50 percent, so the new burden now may put these sectors in further trouble. In such a situation, many Indian exporters have requested the Commerce Ministry to start negotiations on a Free Trade Agreement or FTA with Mexico, so that the impact of the increased duty can be reduced. Quoting an industry source, Moneycontrol published, this issue has also been raised directly with Minister Piyush Goyal. The source said, “We are hoping to start negotiations, but we were told that Mexico does not want to talk in this direction right now.”
Excuse to deal with external competition
On December 11, Mexico’s Senate approved a proposal that from next year, import duty on more than 1,400 products coming from India, China and other Asian countries will be increased by 50 percent. Mexico is taking this step to protect its domestic industries from external competition. Countries with which Mexico does not have trade agreements will face these increased tariffs, such as India, China, South Korea, Thailand and Indonesia.
EEPC India Chairman Pankaj Chaddha told Moneycontrol that India should immediately start FTA negotiations with Mexico, so that the impact of rising tariffs can be mitigated. He expressed hope that the government will take steps in some direction soon. EEPC India had written a letter to the Commerce Ministry in November itself, warning that Mexico’s rising tariffs could have a major impact on India’s engineering exports. Therefore, he requested the government to start negotiations on a free trade agreement or at least a preferential trade agreement.
How much did engineering exports decrease from April to October?
There was a 12 percent decline in India’s engineering exports to Mexico between April and October 2025. During this period, there was a decline of 7 percent in the export of steel, 26 percent in iron and steel products, 56 percent in aluminum and its products, 20 percent in auto components and 32 percent in two and three wheelers.
India’s total exports to Mexico in fiscal year 2025 stood at $5.75 billion. In this, engineering goods had the largest share at $3.53 billion. This was followed by electronic goods at $544.57 million, organic and inorganic chemicals at $400.53 million, medicines and pharma products at $320.19 million, readymade garments at $190.26 million and plastic and linoleum products at $158.76 million. Apart from this, spices, leather products and gems and jewelery are also sent significantly to Mexico.
