[🇮🇳] Indian Economy watch- All new developments.

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View attachment 22916India warns of retaliation as Mexico imposes 50% tariffs​

By Mudit Dube

Dec 13, 2025

03:07 pm

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What's the story

India has strongly opposed Mexico's sudden decision to raise import tariffs on goods from countries without free trade agreements. The Indian government has warned that it may take "appropriate measures" to protect its exporters while continuing diplomatic efforts to reverse the move. The unilateral tariff increase could see duties rise as high as 50% on certain products, which India says goes against "the spirit of cooperative economic engagement" between the two nations.


Trade implications

Tariff revisions impact 1,463 product categories​

The tariff revisions by Mexico affect a whopping 1,463 product categories. Most products are likely to attract duties of around 35%, but the rates will vary between 5% and 50%.This broad range highlights the potential impact on international trade relations and supply chains across these countries.

Strategic move

Mexico's tariff proposal resubmitted amid USMCA negotiations​

Mexico's Ministry of Economy resubmitted the tariff proposal on December 3, 2025, speeding up the legislative process. The government has cited support for local production and reducing trade imbalances as its main reason. However, many believe this is a strategic move related to Mexico's ongoing USMCA review negotiations with the United States and American pressure to align tariff policies against China.

Diplomatic efforts

India's swift response and ongoing discussions​

In response to the tariff hike, India has acted swiftly. Commerce Secretary Rajesh Agrawal has already held high-level talks with Mexico's Vice Minister of Economy Luis Rosendo. The Indian Embassy in Mexico raised concerns on September 30, 2025, seeking special concessions to protect Indian exports. The Department of Commerce is now assessing the full impact of these tariff revisions while working with Mexican authorities for mutually beneficial solutions under international trade rules.

Exporter protection

India's stance on protecting exporter interests​

The actual impact on Indian exports will depend on how essential Indian goods are to Mexican supply chains and whether Indian companies can get exemptions or pass tariff costs to Mexican consumers. The detailed list of affected items is yet to be officially notified. Despite the dispute, India has emphasized its commitment toward a stable and balanced trade environment that benefits businesses and consumers in both countries.

Warning Mexico is going to backfire for India because, like Bangladesh, Mexico hardly exports anything to India. Mexico has little to lose...

More importantly, this shows how serious the Trump administration is - to cut down Indian economy to size, especially its auto parts exports to Mexico. Interesting times ahead.