नवीनतम
Mexico hits India with 50% tariffs
NEW DELHI [Maha Media]: After the United States, Mexico has decided to impose tariffs as high as 50 per cent on the import of select goods from India and other Asian nations that do not have a trade deal with Mexico City. The move comes at a time when Mexican President Claudia Sheinbaum's government is under immense pressure from Washington to curtail business with China, despite opposition from local business groups warning that higher tariffs will raise costs.
New duties have been imposed on imports of auto parts, light cars, toys, clothing, textiles, plastics, furniture, footwear, steel, household appliances, leather goods, aluminum, paper, trailers, glass, soaps, cardboard, motorcycles, perfumes, and cosmetics.
Despite their geographical difference, India and Mexico have developed a robust trade partnership. Trade between the two nations climbed from $7.9 billion in 2019-20 to more than $8.4 billion in 2023-24, according to data from the Confederation of Indian Industry (CII).
The new duties will impact several trade categories, with many goods witnessing an increase of up to 35 per cent, but the automobile sector is expected to be most affected by Mexico's move. The import duty on cars will rise to 50 per cent from 20 per cent, dealing a significant blow to India's largest vehicle exporters to Mexico, including Volkswagen, Hyundai, Nissan and Maruti Suzuki.
The new tariffs are expected to impact shipments worth $1 billion from major Indian car exporters, including Volkswagen and Hyundai, according to a report by Reuters.
The Society of Indian Automobile Manufacturers, an industry group that counts VW, Hyundai and Suzuki among its members, had reportedly urged India's commerce ministry in November to press Mexico to "maintain the status quo" on tariffs for vehicles shipped from India, according to a copy of the letter.
"The proposed tariff hike is expected to have a direct impact on Indian automobile exports to Mexico...we seek the Government of India's support to kindly engage with the Mexican government," the industry body said in its letter to the commerce ministry before the tariff was finalised.
It was not immediately clear what steps the carmakers, industry body and Indian government will take next.
The tariff hike could force Indian automakers to reevaluate strategies reliant on Mexico, which is India's third-largest car export market after South Africa and Saudi Arabia. Car manufacturers in India have relied on exports to ensure production is maximised and there are economies of scale. Some also rely on exports to cushion slower domestic sales or improve margins - a business strategy that may need to be redrawn.
The tariff hike, which mirrors a rise in global tariffs, including levies championed by US President Donald Trump, could also complicate Prime Minister Narendra Modi's efforts to market India as a low-cost manufacturing alternative to China.
Piyush Arora, chief of VW's Indian unit, Skoda Auto Volkswagen, said India has been a strong export base for many years and the company ships to more than 40 countries from here.
"Mexico has consistently been one of our important export markets, given the rising demand there and the traction of our India-made models," Arora said before the tariffs were approved.
