India Seeks to Boost Trade With Mexico Amid Tariff Concerns

India aims to strengthen trade with Mexico in software, pharmaceuticals, and IT, according to Pankaj Sharma, India’s Ambassador to Mexico. The diplomat emphasized that India hopes President Claudia Sheinbaum will exempt Indian exports from the tariffs she has proposed on a range of Asian products.

Sharma also highlighted the automotive, chemical, and plastics industries as areas with strong potential for growth in bilateral trade. He described current trade levels as far below the potential for two major economies. “I think it is time we focus on each other.”

As Sheinbaum’s agenda has focused on mitigating US tariff threats, Mexico’s proposed tariffs on imports from Asia, particularly China, have added complexity to the outlook. Mexico’s larger trade deficit with China was one of the factors that motivated Sheinbaum’s proposal for tariffs on more than 1,400 imported products, ranging from cars and auto parts to steel, toys, and furniture. The plan targets imports from countries without free trade agreements with Mexico, including China and India.

Sharma is lobbying to ensure India is excluded from these tariffs. “We hope that at least India is not affected by these tariffs,” he said. He also suggested that a bilateral free trade agreement could eventually be negotiated, citing ongoing feasibility discussions.

India has faced challenges from former President Trump’s trade war, though it is pursuing agreements with Washington, the EU, and Australia to diversify supply chains and expand markets. Sharma noted that several pharmaceutical and vaccine manufacturers are exploring the possibility of establishing plants in Mexico. Over 250 Indian companies, including United Phosphorus Limited, already operate in the country.

Mexico-India Trade and Investment

Mexico’s main export to India last year was phones, including mobile devices, totaling US$242 million, while India’s top export to Mexico was automobiles, valued at US$1.3 billion. Although Indian investment in Mexico reached US$650 million last year, the trade balance has become increasingly uneven. Since 2018, Mexico’s trade deficit with India has grown more than sevenfold, from US$1 billion to US$7.7 billion in 2024.

The gap is expected to widen further as Mexico’s crude oil exports, including shipments to India, continue to decline. Last year, Mexico exported US$1.6 billion in crude to India; this fell to US$291 million through September 2025 due to domestic refining priorities.

In 2024, foreign direct investment (FDI) from India into Mexico totaled US$72.6 million, primarily consisting of US$58 million in inter-company debts, US$13.9 million in reinvested earnings, and US$744,000 in new equity capital. Geographically, Mexico City received the largest share at US$42.4 million, followed by the State of Mexico with US$11.6 million.

In an interview with MBN, Ambassador Sharma noted that Indian firms have excelled in automobiles, IT, and pharmaceuticals, with companies like HCLTech, Bajaj, and Dr. Reddy’s investing in Mexico. “Mexican companies have reciprocated this investment, with well-known brands like Bimbo, Cinepolis, Kidzania, and Nemak making their mark in India. Mexican investments in India amount to about US$810 million, while Indian investments in Mexico have surged to about US$3 billion,” he added.