India wants to boost trade with Mexico in software, pharmaceuticals and IT, its top Mexican diplomat said, while also hoping President Claudia Sheinbaum will exempt its exports from tariffs she’s proposed on a range of Asian goods.
Pankaj Sharma, India’s ambassador to Mexico, also touted the automotive, chemicals and plastics sectors as potential growth areas in a bilateral trade relationship he described as much smaller than befitting his country’s status as the world’s fourth-largest economy, and Mexico’s as No. 12.
“Our trade is much below the potential that both countries have today,” Sharma said in an interview. “I think it is time that we focus on each other.”
Entering her second year in office, Sheinbaum has focused much of her trade agenda on staving off tariff threats from the US, by far Mexico’s top trading partner, with the proposed Mexican duties on imports from Asian producers, especially China, muddying the picture.
India has also been hit by US President Donald Trump’s trade war, though it aims to reach a deal soon with Washington. It has fast-tracked talks with the EU and Australia in a bid to diversify supply chains and develop new markets. Trump’s punitive 50% tariffs on Indian goods have also pushed New Delhi to reset relations with China in addition to stitching deeper trade ties in Latin America, including with Chile and Peru.
Sharma spoke on the sidelines of an Indian business event last week in Mexico City. He noted that “a very large number” of pharmaceutical and vaccine manufacturers are evaluating plans to set up plants in Mexico, but didn’t go into further detail.
The ambassador touted the more than 250 Indian companies that currently operate in Mexico, including fertilizer and agrochemicals giant United Phosphorus Limited. But India-Mexico trade reached only $8.6 billion from April 2024 through March of this year, according to India’s commerce ministry.
Telephones, including mobile phones, were Mexico’s top export to India last year, amounting to $242 million. Meanwhile, the biggest category of Indian imports to the Mexican market was automobiles, totaling $1.3 billion, according to Mexico’s economy ministry.
While total investment from Indian firms in Mexico reached some $650 million last year, according to Sharma, the balance of trade has grown lopsided in recent years.
Since 2018, Mexico has been importing more from India but selling less as its trade deficit with the world’s most populous nation has grown more than seven-fold over that time, from $1 billion to $7.7 billion in 2024, according to official data.
The Mexico-India trade gap is poised to widen even more, as Mexican oil exports continue to fall, including to India.
While the value of Mexican crude shipped to India totaled $1.6 billion last year, it has fallen to just $291 million this year through September, according to Mexico’s central bank, as the government prioritizes domestic refining.
Mexico’s even wider trade deficit with China was one of the reasons Sheinbaum recently included proposed tariffs on a range of Chinese imports, along protecting some national industries from cheaper Chinese products that she argues have harmed some local producers.
In September, Sheinbaum proposed the duties on more than 1,400 categories of imported products — including cars, auto parts, steel, toys and furniture — at rates ranging from 10% to 50%. The proposal targets imports from countries with which Mexico does not have a free trade agreement, including both China and India.
But the plan has been delayed until at least December as opposition has mounted from local business lobbies and even some members of the ruling party. Critics argue that Mexico should diversify away from its overwhelming dependence on US buyers for its exports.
Sharma aims to persuade Sheinbaum to re-think the tariff plan currently under consideration in Congress, which is dominated by her ruling coalition.
“We are hopeful that at least India will not be impacted by these tariffs,” he said.
The veteran diplomat who has served in Indian missions in the US, Russia and the Netherlands, among others, went on to suggest a bilateral free trade deal could ultimately be inked, citing years-long discussions over a feasibility study.
Still, he couched the talks as “a work in progress.”
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