📊Executive Summary

Mexico's recent decision to increase tariffs will significantly impact India's exports across various sectors, including automobiles, electronics, and machinery. The new tariffs, approved on December 11, 2025, will come into effect on January 1, 2026, imposing duties ranging from 5% to 50% on goods from countries without free trade agreements with Mexico, notably affecting India's $5.75 billion export market. The automotive sector, which includes passenger vehicles and auto components, will face the steepest increases, eroding competitiveness in a market influenced by USMCA sourcing rules. Electronics exports, particularly smartphones, will also be heavily impacted, facing a new 35% tariff that could effectively shut out Indian products from the Mexican market. This situation necessitates urgent procurement strategies to mitigate the risks associated with increased costs and disrupted supply chains....