Mexico Duty Hike: Impact on Auto Component Exports

New Delhi, Dec 12 (PTI) Domestic auto component manufacturers will face enhanced cost pressures with Mexico hiking duties on Indian imports, according to industry body ACMA.

Auto parts exports to Mexico in FY25 stood at USD 834 million, and in the first half of the current fiscal, the shipments stood at USD 370 million.

"Mexico's revised import duties on non-FTA partners, including India, could add cost pressures for our exporters," the Automotive Component Manufacturers Association of India (ACMA) Director General Vinnie Mehta told PTI.

ACMA remains hopeful that ongoing bilateral dialogue between the two governments will ensure stability and continuity in the growing automotive trade, he added.

India's auto component exports to Mexico largely comprise powertrain and driveline parts, precision forgings, chassis and brake systems, and key electrical and aftermarket products. There is a strong demand, especially for forgings and precision-machined components.

Mexico's Senate approved the new tariff measure on December 11, 2025, and it has since been cleared by both chambers of Congress.

The higher duties will take effect on January 1, 2026. Under the decision, Mexico will impose steep import tariffs - ranging from about 5 per cent to as high as 50 per cent on a wide range of goods from countries that do not have free trade agreements with Mexico, including India, China, South Korea, Thailand and Indonesia.

As per the Department of Commerce data for the year 2024-25, out of India's total passenger vehicle exports to the world, Mexico accounts for about 13 per cent (USD 887 mn), while for two wheelers, Mexico's share is 12 per cent (USD 390 mn).

Sources said that auto industry body the Society of Indian Automobile Manufacturers (SIAM) had written to the government regarding the impending duty hike.

It had sought status quo in terms of duties, citing the impact on the domestic industry.