India gets cosy with US neighbours to dodge tariffs

India is intensifying trade discussions with Canada and Mexico as the three nations aim to boost markets and forge new relationships following U.S. President Donald Trump's tariff actions. Indian and Canadian negotiators aim to hold their fifth round of talks starting October 5, while a potential deal could be finalized in December when Prime Minister Narendra Modi visits Canada, according to Bloomberg.

A framework for formal trade negotiations with Mexico is also being developed, as both countries seek to diversify commercial ties and reduce dependency on US markets. With a combined economic output exceeding $8 trillion, the three countries are navigating the impact of Trump's trade policies. Mexico is actively seeking an agreement with the US to change their existing pact, while Canada and the US recently suspended their talks.

India faces tariff threats from a new law enabling Trump to impose up to 100% levies on nations importing Russian oil and gas. New Delhi reached an interim trade deal with the US earlier this year and is currently negotiating the tariff rate. Canadian Prime Minister Mark Carney affirmed the importance of Canada-India relations and noted that trade discussions have been progressing well.

India has also expanded trade agreements with the UK, Oman, and New Zealand, and is continuing talks with the EU and other economies. India's trade with Canada and Mexico each reached nearly $8 billion in 2025-26, with Mexico interested in greater access to India's market for its tequila, fruit, and auto components, while India seeks to lower barriers for automobiles, auto parts, and steel.