India, Mexico may start discussion on trade deal

India and Mexico may consider launching formal bilateral trade negotiations that would help to ringfence Indian goods from proposed high Mexican tariffs on shipments from countries that do not have any preferential trade ties with the North American country, people in the know said.

- Rajeev Jayaswal

The high tariffs on Indian goods are an unintended fallout of Mexico's move, which is actually aimed at curbing imports from China, the nation's second largest source of imports after the US with over $130 billion in annual shipments, these people said, requesting anonymity. In comparison, India's merchandise exports to Mexico in 2024-25 were worth less than $6 billion.

On Wednesday, Mexican lawmakers approved up to 50% tariffs on imports from countries with which the country does not have preferential trade ties, effective January 2026. It will impact most Asian economies such as China, India, South Korea, Thailand and Indonesia. The Mexican move is more to placate the Trump administration that accuses the country of rerouting (transshipment) of Chinese goods to the US, the people quoted above said. The Mexican government, however, justified its tariff move on the ground of supporting its local manufacturing.