Indian exporters push for early FTA talks with Mexico amid looming tariff hikes

Indian exporters have called on the Centre to urgently initiate free trade agreement (FTA) negotiations with Mexico after the country cleared sharp tariff increases on imports from nations that do not have preferential trade arrangements.

According to industry sources, the revised duties—set to take effect from 2026—could climb to as much as 50 per cent, sharply undermining the competitiveness of Indian products in what has emerged as one of their fastest-growing overseas markets.

Exporters said they had flagged the risk well in advance, writing to the commerce ministry on November 2, weeks before Mexico formally approved the tariff overhaul. In their communication, they warned that the move could disrupt exports across a wide range of sectors, including automobiles and auto components, engineering goods, machinery, electrical equipment, electronics, pharmaceuticals, organic chemicals, textiles and plastics.

Mexico has become a key destination for Indian engineering exports in recent years, with companies steadily building market share. Industry representatives caution that the proposed tariff regime could significantly raise costs, weaken India’s position against competitors from FTA partner countries, and force supply-chain realignments.

With Mexico reshaping its tariff structure to promote near-shoring and prioritise trade partners with FTAs, exporters are now urging the government to swiftly explore either a comprehensive trade agreement or an interim preferential pact. They warn that delaying negotiations until closer to the 2026 deadline could leave Indian companies with little room to safeguard their presence in the Mexican market.