1. Context
Mexico has extended import tariffs (5–50%) on goods from countries without a Free Trade Agreement (FTA), including India. While India’s overall export basket remains safe, the auto sector faces concentrated risk because Mexico is a major destination market.
2. What Mexico Has Done
• Tariffs of 5–50% on non-FTA partners, including India.
• First imposed in April 2024 for 2 years; now extended from Jan 1, 2026.
• Aim: Protect domestic industry, reduce import dependence.
3. Why India Is Affected
Though total exports to Mexico are just 1.3% of India’s global exports, certain sectors rely heavily on this market.
Export Profile (Key Data)
• India’s exports to Mexico (2024–25): $5.7 bn.
Auto sector exposure:
• Motor cars + parts = $1.4 bn (25%) of exports to Mexico.
• Motorcycles = 7% of exports to Mexico.
4. Why Auto Sector Faces the Highest Risk
• Market dependence.
• Mexico accounts for 10% of India’s global auto & auto-parts exports.
• Mexico constitutes 12% of India’s motorcycle exports.
• Sector concentration → Small tariff changes cause disproportionate impact.
• Mexico is among the largest buyers of Indian automobiles globally.
