India has formally pushed back against Mexico’s decision to sharply raise import duties on products sourced from countries that do not have free trade agreements with it, cautioning that New Delhi may respond with countermeasures if the move adversely impacts Indian exporters. At the same time, India has said it will continue engaging Mexico through diplomatic channels to seek a negotiated resolution.

Mexico’s Parliament has cleared legislation that allows for steep tariff hikes on imports from several nations, including India, China and Brazil. The bill received final approval from the Mexican Senate this week after being passed earlier by the lower house, and is scheduled to come into force from January 1, 2026.

Indian officials have expressed concern that the proposed increase — which allows import duties to climb to as much as 50 per cent on select goods — runs counter to established norms of cooperation and predictability in global trade. According to government sources, the absence of prior consultations makes the move inconsistent with the principles governing the multilateral trading framework.

While acknowledging that the policy is not directed specifically at India, New Delhi has flagged that unilateral changes to Most Favoured Nation (MFN) tariff rates undermine the collaborative economic relationship between the two countries, a senior official said.

The Mexican legislation proposes revisions across 1,463 tariff lines spanning more than a dozen industries. These include automobiles and components, consumer vehicles, plastics, toys, apparel, footwear, furniture, textiles, aluminium, glass and other manufactured goods. The revised duty structure ranges from 5 per cent to 50 per cent, with the majority of items expected to attract tariffs of roughly 35 per cent.

Apart from India, exporters from China, South Korea, Thailand, Indonesia, Brazil, South Africa and the UAE are also set to be affected, with China projected to face the largest impact.

Notably, Mexico’s economy ministry had earlier postponed the proposal until August 2026 following objections from both international trading partners and domestic stakeholders. However, the bill was reintroduced without warning and pushed through the legislature earlier this month.

Mexican authorities have defended the decision as an effort to strengthen domestic manufacturing, reduce dependence on imports and correct trade imbalances. Officials have estimated that the revised tariff regime could generate additional annual revenue of nearly USD 3.8 billion.

Trade analysts, however, view the move through a wider geopolitical lens. The tariff hike is seen as aligning closely with Washington’s trade posture, particularly as Mexico navigates the ongoing review of the USMCA agreement and attempts to curb the rerouting of Chinese-origin goods into the US market. Mexican diplomat Horacio Saavedra was quoted by local media as saying the measure reflects shared concerns between Mexico and the US over import practices that have hurt local industries, especially in textiles, garments and manufacturing.

India has already stepped up engagement with Mexican authorities. Commerce Secretary Rajesh Agrawal has held senior-level talks with Mexico’s Vice Minister of Economy, Luis Rosendo, and further technical discussions are expected. The Indian Embassy in Mexico had first flagged its objections in late September 2025, requesting safeguards for Indian exporters.

The Commerce Ministry is now assessing the sector-wise impact of the proposed tariffs while continuing discussions with Mexico to identify solutions that align with international trade obligations.

Trade figures show that India was Mexico’s ninth-largest trading partner in 2023, with two-way trade amounting to USD 10.58 billion. Indian exports accounted for USD 8.03 billion of this, led by automobiles, auto parts, pharmaceuticals, engineering goods and chemicals. Imports from Mexico, worth USD 2.54 billion, primarily include crude oil, gold jewellery, chemical inputs and telecom equipment.

Officials noted that the actual fallout for Indian businesses will depend on how deeply Indian products are embedded in Mexican supply chains, the scope for exemptions, and whether higher duties can be absorbed or passed on to consumers. Detailed product-level tariff notifications are still awaited.

India, the source said, will continue to pursue a diplomatic solution but retains the option to act decisively if required to protect its export interests.