Paper: GS – II, Subject: International Relations, Topic: India Relations with Other Nations, Issue: Mexico imposes 50% Tariffs.
Context:
The Mexican Senate’s approval of 50% tariffs on imports from India, China, and other Asian countries, focusing on the potential impact on Indian exporters, particularly in the automobile and parts manufacturing sector.
Key Takeaways:
India exports nearly $1 billion worth of goods to Mexico, with auto components and vehicles forming a major chunk.
Impact of Mexican Tariffs on Indian Exports: Key Points:
- Increased Import Duty: The import duty on cars will rise to 50% from 20%.
- Timing: The tariffs are set to take effect next year.
- Affected Sectors: The tariffs will affect hundreds of items, including textiles, apparel, steel, auto parts, plastics, and footwear.
- Rationale: Mexico’s move is driven by concerns over the rerouting of goods due to US tariffs and ahead of the United States-Mexico-Canada Agreement (USMCA) review.
Trade Data and Export:
India’s Exports to Mexico:
Total Goods Exports: Total goods exports to Mexico stood at $5.3 billion during the last fiscal year.
Top Exported Items (April-September 2025):
- Vehicle & parts: $985.75 million
- Electric Machinery: $316.06 million
- Nuclear Reactor & parts: $284.61 million
- Organic Chemicals: $163.55 million
While the Mexican government aims to protect its local industries and generate revenue. The Indian government and industry bodies need to work together to mitigate the impact of these tariffs and explore alternative avenues for growth.
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