Trade talks: India and Mexico open dialogue to blunt tariff shock; preferential pact on the table – The Times of India

India has initiated talks with Mexico to soften the impact of the Latin American country’s sanctions on imports of goods from non-FTA partners, including India, and explore the possibility of a preferential trade deal to safeguard bilateral trade interests, ANI reported.Mexico has approved tariff increases of up to 50 percent, effective 2026, on select imports from Asian countries such as India and China. The measure, aimed at supporting domestic industry and correcting trade imbalances, increases MFN import duties by 5 to 50 percent on 1,455 tariff lines under the WTO framework, and targets countries without free trade agreements.According to Indian estimates, exports worth about $2 billion could be affected, mainly cars, two-wheelers, auto parts, textiles, iron and steel, plastics, leather and footwear. The proposal was first launched in September 2025, postponed until August 2026 following concerns from non-FTA partners and industry, and then resubmitted on December 3, 2025. It has since been approved by both houses of the Mexican Parliament and is awaiting notification in the Presidential Gazette.Merchandise trade between India and Mexico stood at $8.74 billion in 2024, with Indian exports of $5.73 billion and imports of $3.01 billion, resulting in a trade surplus of $2.72 billion for India, according to DGCI&S data. Top Indian exports include light vehicles ($0.88 billion), motorcycles ($0.39 billion), base metals ($0.76 billion), auto parts ($0.74 billion), mechanical machinery ($0.46 billion), textiles and clothing ($0.41 billion), chemicals ($0.43 billion) and pharmaceuticals ($0.38 billion). The main imports from Mexico consist of crude oil ($1.7 billion), smartphones ($0.27 billion) and gold ($0.17 billion).The government said it has been closely reviewing Mexican tariff reviews, engaging stakeholders and conducting dialogue to protect exporters while ensuring a stable trade environment for businesses and consumers in both countries, ANI reported. The Indian embassy had raised its concerns with Mexico’s Ministry of Economy in late September, which clarified that the measure was not against India and reaffirmed its commitment to bilateral ties.“Thanks to continued engagement thereafter, a virtual meeting was held between Commerce Secretary Shri Rajesh Agrawal and Deputy Minister Dr. Luis Rosendo on December 2, 2025, where it was agreed to pursue a trade agreement to quickly mitigate the impact, with technical discussions initiated from December 12, 2025,” Agrawal said in a presentation.A recent report from the Global Trade Research Initiative (GTRI) warned that the Mexican tariff change could significantly disrupt Indian exports from January 1, 2026, noting that the policy aligns more closely with recent US protectionist measures and signals support for near-shoring and tighter North American supply chains.