Mexico Slaps 50% Tariffs on Indian Goods: Who Will Bear the Brunt?

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Mexico has cleared the way for imposing tariffs of up to 50% on hundreds of goods from countries without a formal trade agreement, including India and China. The move aims to protect local employment and manufacturing, according to President Claudia Sheinbaum's government. This move is expected to significantly impact India's automotive sector, with Mexico being its third-largest car export market. The approval by Mexico's Senate affects over 1,400 products, including vehicles, electrical equipment, machinery, and pharmaceuticals. Indian car exporters, such as Volkswagen and Hyundai, are expected to bear the brunt of this decision, with estimated losses of $1.8 billion. India's vehicle exports to Mexico were valued at $1.86 billion in 2022, making it the largest chunk of exported goods. Other sectors that may be affected include electrical equipment, machinery, organic chemicals, and aluminum. Piyush Arora, chief of VW's Indian unit, Skoda Auto Volkswagen, expressed concern over the move, citing the importance of Mexico as an export market. Skoda Auto accounts for nearly 50% of India's total car shipments to Mexico. While the Indian government and industry are exploring ways to mitigate the impact, the tariffs are expected to come into effect from next year. The move is a significant blow to India's automotive sector, which had been relying heavily on exports to Mexico.