India–Mexico Trade Negotiations Kick Off to Counter Upcoming Tariff Hikes

New Delhi — India and Mexico have initiated discussions for a Free Trade Agreement (FTA) to address trade issues arising from Mexico’s planned tariff hikes on imports from non-preferential trade partners, including India. The talks aim to finalize the terms of reference for the FTA, which will set the framework and scope for negotiations.

The move comes as Mexico announced plans to impose up to 50% tariffs on certain imports from countries that do not have preferential trade agreements, effective January 1, 2026. Officials noted that Mexico approached India to strengthen bilateral trade relations, prompting preliminary discussions to find mutually beneficial solutions.

India’s exports to Mexico totaled $5.75 billion in FY25, while imports stood at $2.9 billion. The two nations are exploring ways to mitigate the impact of the tariff increases and align solutions with global trade rules. Indian officials emphasized the need to protect exporters’ interests while ensuring cooperative engagement.

Earlier in 2025, Mexico had proposed the tariff increases to support local production and reduce trade imbalances. Following objections from non-FTA partners, including India, and domestic industry groups, the proposal was initially deferred to August 2026. However, Mexico resubmitted the proposal in early December, accelerating its legislative process.

India had already sought special concessions to shield its exports from these new tariffs. Commerce Secretary Rajesh Agrawal held discussions with Mexico’s Vice Minister of Economy Luis Rosendo, and further technical meetings are planned to finalize the FTA framework. Exporters see the agreement as an opportunity to benefit from the United States-Mexico-Canada Agreement (USMCA), which could enhance market access for Indian goods in the region.

Officials cautioned that unilateral tariff hikes without prior consultations do not align with the spirit of cooperative economic engagement. The FTA negotiations are expected to balance both countries’ trade interests while ensuring continued growth in bilateral commerce.