India, Mexico Begin Trade-Deal Talks As Tariff Hikes Put $2 Billion Of Exports At Risk

India has initiated technical discussions with Mexico from Dec. 12 to explore a preferential trade agreement as New Delhi moves to soften the impact of Mexico's proposed tariff hikes that can affect nearly $2 billion of Indian exports, Commerce Secretary Rajesh Agrawal said.

"The quickest way to get concessions for India from Mexico tariffs is a preferential trade agreement," Agrawal said.

The tariff measures, which Mexico has clarified are MFN-based and not targeted at India, are expected to hit a range of Indian sectors, including automobiles, two-wheelers and auto parts, textiles, iron and steel, plastics, leather and footwear. Mexico has indicated that the broader intent of the move is to curb surging imports from China, rather than disrupt Indian supply chains.

India has raised concerns with Mexican authorities, flagging that higher tariffs are not conducive to stable trade, especially at a time when bilateral economic engagement is expanding. India–Mexico bilateral trade currently stands at $8.7 billion, with engineering goods and manufactured products forming a key part of India's export basket.

According to officials, Mexico has conveyed that Indian exports are not the primary target of the tariff action and that the measures are part of a wider trade policy response. However, India has made it clear that the potential impact on its exporters remains a concern, particularly for sectors with deep manufacturing linkages.

With the tariff hikes being applied on a most-favoured-nation basis, officials noted that there is limited recourse under WTO rules, prompting India to pursue a bilateral route to resolve the issue. The ongoing technical discussions are aimed at identifying pathways for a preferential trade arrangement that could provide relief to Indian exporters and preserve market access.