Mexico has implemented tariffs reaching 50% on diamond imports from India, effectively eliminating a strategic workaround under the United States-Mexico-Canada Agreement (USMCA). The 50 per cent tariff is likely to impact small and medium-sized enterprises, rather than larger ones.

Mexico’s Senate ratified the tariff structure on December 10, applicable to imports from India, China, South Korea, Thailand, and Indonesia. The policy takes effect January 1, 2026. Comprehensive tariff schedules remain unpublished.

The measure targets Indian diamond manufacturers utilizing Mexico as a transshipment hub—importing rough or semi-processed stones, conducting minimal polishing operations to establish Mexican origin, then accessing the U.S. market duty-free under USMCA provisions.

The tariff regime nullifies Indian manufacturers’ planned Mexican manufacturing investments. While not legally prohibited, such operations become economically unviable. Small and medium-sized enterprises face disproportionate exposure compared to larger industry players.

The tariffs represent Mexico’s broader trade policy realignment, pressuring Asian trading partners lacking formal free trade agreements toward bilateral negotiations. India maintains a $2.8 billion trade surplus with Mexico.