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India and Mexico are discussing ways to mitigate the interaction of Mexico’s projected tariff increases connected countries it does not person a escaped commercialized statement with, which includes India, Commerce Secretary Rajesh Agrawal said connected Monday (December 15, 2025). A speedy mode to resoluteness the contented would beryllium done a Preferential Trade Agreement, helium said, adding that the projected tariffs would interaction astir $2 cardinal worthy of exports from India to Mexico.
The Mexican authorities had connected December 3 re-submitted to its Parliament a erstwhile connection to hike tariffs to 50% connected imports from countries which it had accorded Most Favoured Nation (MFN) presumption and had not signed a commercialized statement with. The connection was cleared by some houses of the Mexican Parliament connected December 9-10, and present awaits the Presidential gazette notification this week.
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“Tariffs person been accrued connected a most-favoured federation basis, wrong the World Trade Organization framework,” Mr. Agrawal said astatine a property briefing connected Monday. “When MFN tariffs are increased, it impacts non-Free Trade Agreement and non-Bilateral Trade Agreement partners. That is however it volition interaction India arsenic well.”
He added that, owed to the tariffs being connected an MFN ground and wrong the ineligible model of the World Trade Organization (WTO), India would not person recourse astatine the WTO to situation the decision. However, it is engaging bilaterally with Mexico to find a mode forward.
“According to the archetypal connection that was expected to travel into effect from August 2026, the interaction connected Indian exports would person been $3.8 billion,” Mr. Agrawal said. “Subsequently, we person been engaged with them and we flagged that, though this was wrong their ineligible rights to rise these tariffs, it would not beryllium bully for trade. The last program they person travel retired with volition person an interaction of $2 cardinal connected India exports.”
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The tariffs are expected to interaction India’s automobile, two-wheelers, car parts, textiles, robust and steel, plastics, and leather and footwear exports to Mexico.
“The Embassy of India raised contiguous concerns with Mexico’s Ministry of Economy connected September 30, which clarified that the measurement is not directed against India and reaffirmed its committedness to the bilateral relationship,” Mr. Agrawal said.
He added that, from what “he has heard”, Mexico’s determination is chiefly aimed astatine reducing imports from China.
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“We discussed astatine the Secretary level and present determination are method discussions astatine the associated caput level,” Mr. Agrawal said. “The lone accelerated mode guardant is to get into a Preferential Trade Agreement, due to the fact that a Free Trade Agreement would instrumentality a batch of time. We are trying to spot what would beryllium a bully mode forward.”
A Preferential Trade Agreement is simply a bilateral statement betwixt 2 countries to trim tariffs oregon supply tariff exemptions connected circumstantial products. A Free Trade Agreement is much expansive, dealing with astir items, and including lone a tiny antagonistic database connected which the exemptions bash not apply.
