Mexico has authorized potential import duties on a range of goods, raising questions for Indian diamond companies that have been using the North American country as a gateway to the US during the tariff crisis.
A new bill, which the nation’s legislative houses approved last week, calls for tariffs on several products from countries including India, China, South Korea, Thailand and the United Arab Emirates (UAE), according to translations of government announcements Rapaport News received Tuesday.
Initial studies indicate diamonds and jewelry are not among the products the levies will hit, said Supreme Kothari, a partner in Mumbai-based law firm Economic Laws Practice (ELP).
The proposal would place tariffs — reportedly up to 50% — on automotive parts, light vehicles, clothing, plastics, steel products, household appliances, toys, textiles, furniture, footwear, leather goods, paper and cardboard, motorcycles, aluminum, trailers, glass, soaps, perfumes and cosmetics, according to the government announcements.
“On the basis of information currently available, diamonds, precious stones and jewelry do not appear to be within the scope of the proposed tariff package and do not appear to be a targeted sector under this initiative,” Kothari told Rapaport News on Tuesday.
Stop-off point
The US introduced tariffs on Indian goods on April 5, starting at 10% and later increasing it to 25% on August 1 and 50% on August 27. Some diamond manufacturers have used Mexico as a stop-off point for shipments of polished to the US during this period.
In certain cases, companies have exported loose stones to Mexico — possibly via other locations — with those diamonds then going into low-cost settings ahead of onward shipment to the US, market participants have told Rapaport News in recent months. This enables tariff-free entry to America under the United States-Mexico-Canada Agreement (USMCA). Suppliers have then charged a service fee to clients that take delivery in the US. Details of the process and its legal basis are unclear, as the August and September issues of the Rapaport Research Report explained.
However, direct shipments of gems and jewelry from India to Mexico have remained low: They totaled just $81.3 million during the seven months from April to October of this year, albeit up from $7.7 million in the same period of 2024, according to government data that Sabyasachi Ray, executive director of India’s Gem & Jewellery Export Promotion Council (GJEPC), shared with Rapaport News. The statistics do not show how many goods transferred to Mexico via other places.
Exports to the US slid 45% year on year to $3.14 billion for the same seven months, while shipments to the UAE and Hong Kong increased as India’s exports diversified in response to the tariffs.
Not final
The Mexican Chamber of Deputies, the country’s lower house, announced on December 9 that it had voted in favor of the bill. The following day, the Senate, the upper house, said its members had also voted to progress the draft proposal.
The government has not yet issued a formal executive decree, amended tariff schedule or customs notification, Kothari added. While the policy will reportedly go into effect on January 1, 2026, “this will be formally confirmed only upon publication of the final decree in the official Gazette [of India], at which stage the precise tariff line items (HS codes), rates and implementation mechanics will be known,” he elaborated.
“Indian diamond companies are largely monitoring developments rather than reacting defensively, pending publication of the final tariff schedule,” the tax expert said.
The plan, whose goal is to support Mexican industry, may pressure India to reach a trade deal with the US that will enable lower-cost direct shipments, a manufacturing executive pointed out on condition of anonymity. “If [a US-India] closes soon, it’s good for everyone,” he said.
Image: A polished diamond under the finger of a manufacturing worker in Surat, India. (Shutterstock)
