India is proposing a preferential trade deal with Mexico in an effort to soften the impact of planned tariffs that threaten to affect about $2 billion
worth of Indian exports, India’s trade secretary Rajesh Agrawal said on Monday.
Technical discussions on such a deal are underway following an online meeting between Agrawal and Mexico’s Vice Minister Luis Rosendo this month, Agrawal said, without giving details of India’s proposals.
On Wednesday, Mexico’s Senate approved tariff hikes starting next month of up to 50% on imports from several countries including India, a move analysts and the private sector say is aimed at appeasing the U.S. ahead of the review of a regional trade agreement next year.
Mexico’s government argues that the measure, which has faced opposition from business groups, will bolster local industry, protect employment and address trade imbalances.
India exported goods worth $5.73 billion to Mexico in 2024, while imports stood at $3.01 billion. The key exports include vehicles, base metals, auto parts and textiles.
Preliminary estimates suggest exports totalling $2 billion in value in sectors such as automobiles, auto parts, textiles, steel and iron could be affected, Agrawal said. “Mexico’s primary target is not to hit Indian exports,” Agrawal said, adding India has engaged with Mexico since September this year to “pursue a trade agreement to mitigate the impact promptly.”
“As Mexico has raised tariffs on an MFN (most favoured nation) basis, we don’t see a recourse in the WTO,” he added. Reuters reported last week that Mexico’s decision to raise tariffs will affect $1 billion worth of shipments from major Indian car exporters, including Volkswagen and Hyundai.
