Mexican tariff wave to slam $2 bn auto exports from India

India Inc. faces another external shock to its automotive export engine, with Mexico imposing steep tariffs of up to 50% on passenger vehicles, two-wheelers and auto components from several Asian nations, including India.

- Ayaan Kartik

India Inc. faces another external shock to its automotive export engine, with Mexico imposing steep tariffs of up to 50% on passenger vehicles, two-wheelers and auto components from several Asian nations, including India.

The move directly threatens nearly $2 billion of annual shipments to one of India’s most important overseas markets, and risks chipping away at the strong export momentum that automakers have built in Latin American countries like Mexico, Colombia and Chile, and even African nations like Nigeria and South Africa.

While commerce ministry data showed that $2 billion as a fraction of Indian auto's total exports of $31.4 billion in FY25 (cars $7.2 billion, two-wheelers $3.2 billion, components $21 billion), the Mexican tariff wave threatens to intensify headwinds blowing Indian auto's way.

On the one hand, the US has raised duties on Indian auto parts to 50%. And on the other, Chinese automakers are rapidly expanding their presence across regions like the Americas and Africa, with experts predicting high market shares for the Chinese in the near future in these areas.