In a dramatic departure from its long-standing pro-free-trade stance, Mexico has levied high new taxes on a variety of Asian goods, making India one of the major exporting countries impacted.
According to Reuters, Mexico's Senate has adopted a new tariff regime that increases duties—up to 50% in some cases—on over 1,400 goods imported from nations without official trade agreements with Mexico, marking a dramatic change in policy.
China, India, South Korea, Thailand, and Indonesia are among the countries that are being targeted.

With 76 votes in favor, five against, and 35 abstentions, the upper chamber passed the bill despite significant opposition from China and concerns from domestic trade associations. The bill had previously been adopted by the lower house.
A broad range of consumer items and industrial inputs, such as autos and parts, textiles, clothing, plastics, metals, and footwear, will be subject to the higher prices starting next year and continuing until 2026. The majority of goods are anticipated to be in the 35% range, however some will be subject to the maximum 50% tariff.

Why it's important for India
India, which has worked to increase its exports of engineering products, textiles, and auto parts to Latin America, suddenly has a much harder time breaking into the Mexican market, which is the region's second-largest economy and a crucial gateway to North America. Because Mexico is integrated into North American supply chains, Indian exporters have long used it as a gateway to the United States.
That benefit could be undermined by the tariff increases. According to agency sources, a number of Mexican industries who rely heavily on imports have cautioned the government that increased taxes on items from India and other Asian countries will increase production costs and fuel inflation.

Consequences for the region and India
The tariff change may make Indian exporters less competitive in sectors including steel, textiles, leather goods, and auto parts.
– Push enterprises to reconsider supply-chain routing through Mexico. – Increase landed costs for Indian firms operating in or supplying to North American value chains via Mexico.
The Ministry of Commerce in India has not yet released a statement.
Washington's influence on Mexico's action
Analysts, particularly those in India who monitor Latin American markets, think that pressure from the US ahead of the USMCA (United States-Mexico-Canada Agreement) review next year is a major factor in Mexico's abrupt protectionist shift.

It is believed that President Claudia Sheinbaum's administration is expressing support for Washington's more stringent approach to Chinese commodities in the hopes that this will lessen the broad US tariffs that have affected Mexico's own exports, including steel and aluminum.

The framework of the new penalties closely resembles US trade proceedings, despite Sheinbaum's denial that the tariffs are related to US demands, according to a Bloomberg article.
Compared to a previous proposal that called for harsh tariffs over almost 1,400 tariff lines, the version approved this week is more lenient. Approximately two-thirds of those categories now have less severe tariffs because to legislative action.

In Mexico, conflicting responses
Opposition PAN senator Mario Vazquez stated that while the tariffs would benefit some industries that are being overtaken by lower-priced Chinese imports, "they also act as a tax on consumers," and he asked how the government plans to use the additional money.

The bill will "strengthen Mexican products in global supply chains and protect jobs in priority sectors," according to Emmanuel Reyes of the ruling Morena party.
Local auto associations in particular backed the action, cautioning that Mexico's indigenous manufacturing base could be threatened by China's explosive growth, which now accounts for 20% of the country's auto industry, up from nearly nothing six years ago. Chinese automobile imports will be subject to the highest tariff of 50% under the new regulations.

There will be further adjustments.
In order to facilitate quick changes prior to the USMCA review, the measure also grants Mexico's Economy Ministry broad authority to amend tariffs on non-FTA nations at will. The tariff structures for Indian exporters may fluctuate more as a result of this increased flexibility.

Mexico's action highlights a larger North American trend toward protectionism as the US and Canada both increase their examination of Chinese supply-chain routing.