How Mexico's steep 50% tariffs will impact Indian exporters

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Indian exporters are bracing for potential disruption after Mexico announced steep tariff increases on a wide range of products—threatening one of New Delhi’s fastest-growing markets. The Latin American nation has become a critical destination for India’s automobile industry, with $1.9 billion worth of passenger vehicles shipped there in 2024, making it India’s largest car export market. For some passenger vehicle models, over 20 percent of exports are routed to Mexico, leaving the segment highly exposed to policy shocks.

On December 10, Mexico’s Senate approved a plan to impose tariffs of up to 50 percent on autos and auto parts, textiles, clothing, plastics and steel originating from countries with which it has no trade agreement—India included.

A mixed picture: not all exports are equally vulnerable

A Moneycontrol analysis of Mexico’s import patterns shows that the threat is uneven. In fact, Mexico would struggle to replace more than a tenth of India’s outbound shipments. Of the $5.6 billion exported from India to Mexico last year, goods worth $589 million—about 10 percent—fall into categories where India already commands a 50 percent or higher share of Mexico’s imports.

Aluminium stands out as Mexico’s most difficult-to-replace import from India. India shipped $189 million worth of aluminium products in 2024, accounting for 53 percent of Mexico’s total aluminium imports. Ceramic tiles are another stronghold: India exported nearly $100 million worth of tiles, again capturing more than half the Mexican market.

India’s dominance is even more pronounced in certain tractor segments, where its share reaches 64 percent, leaving Mexico with limited options to diversify quickly even if higher tariffs take effect.

Passenger vehicles, steel and safety bag exports face the sharpest risk

These pockets of strength may soften the overall blow, but they cannot offset the exposure of India’s automobile exporters. Passenger cars alone account for one-third of India’s total shipments to Mexico. Any tariff-driven disruption in this segment would materially weaken India’s export performance in the coming months.

Similarly, Mexico accounted for nearly a third of India’s safety bag exports and 20 percent of flat rolled stainless steel exports from India.

While the tariff decision has put Indian exporters on edge, the degree of impact will depend on Mexico’s final implementation timeline, the extent of exemptions and the ability of Indian firms to absorb duties or reconfigure supply chains.