DECEMBER, 20259TOP STORIESINDIA-MEXICO FTA TALKS BEGIN AS TARIFF HIKES LOOMMexico has recently established high tariff rates on imports from non-preferring trade partners - including India. Tariff rates on imports from non-preferring countries, including India, will be up to 50%.The establishment of high tariffs has compelled India to work with Mexico to explore opportunities to increase trade relations between the two countries. An official stated, "India is already engaged with Mexico for a trade agreement. The terms of reference could be finalised soon".The ongoing India-Mexico FTA negotiations are a key focus of India-Mexico trade talks, aiming to address tariff hikes and strengthen bilateral trade negotiations, while updating trade policy to boost India exports to Mexico.Initial discussions between Indian and Mexican representatives have already commenced regarding a potential free trade agreement (FTA) between the two nations. The intent is to create a framework for further negotiation towards an FTA, and the Terms of Reference (ToR) for the potential agreement will be completed and shared within a few weeks.India's exports to Mexico in FY 2025 totalled $5.75 billion, and imports from Mexico were $2.9 billion. Both countries' officials are working together to find solutions that are positive for both sides since Mexico recently implemented increased tariffs on its own initiative.Mexico initially proposed these tariffs in September to protect domestic producers, reduce the trade imbalance, etc. At that time, due to pressure from India and other non-FTA partners and also due to feedback from several Mexican industries, Mexico delayed implementation of this tariff increase until August 2026. But on December 3, this proposal was reintroduced, making the legislative process much quicker.India is seeking exemptions from the tariffs to safeguard its export activity while Government authorities are cooperating to devise an appropriate solution to comply with Global Trade Agreements. Commerce Secretary Rajesh Agrawal recently met with Mexico's Vice Minister of Economy, Luis Rosendo, to discuss these issues and has scheduled future technical meetings.Another official stated, "The detailed list of items covered is yet to be officially notified but unilateral increases in MFN (most favoured nation) tariffs, without prior consultations, do not align with the spirit of our cooperative economic engagement". Industry representatives have advocated for many years that the benefits of USMCA can be obtained through a formal trade agreement between India and Mexico. IMRAt the Bengaluru Tech Summit, Karnataka launched its new Space Technology Policy, which, besides seeking to draw $5 billion in investments during the next five years, also aspires to place the state as the first space hub of India. The policy sets out to assist a network of 500+ space startups as well as MSMEs, to generate more than 50,000 skill-intensive jobs and to allow companies to build and launch a fleet of more than 50 satellites.According to the state government, Karnataka wants to grab 50% of the Indian space market, which is estimated to be worth 22 billion dollars by 2033, and the state will be ready to accomplish this feat if it becomes the leading space hub in the country.Priyank Kharge, the Minister for IT/BT and Rural Development & Panchayat Raj, said: "By means of this policy, Karnataka is eager to collect investments worth $5 billion, facilitate the growth of 500 plus startups and MSMEs in the space sector, generate a workforce consisting of more than 50,000 highly skilled jobs, and empower the local companies to design and launch a satellite mission involving more than 50 satellites in the coming years."Essentially, a company that directs up to 100 crore worth of investments in the state will be entitled to various benefits that altogether amount to a 20% subsidy on plant costs, 25% on land, a 25% rent allowance for a period of five years, as well as complete exemption from electricity duty for a period of five years. In addition to the above-mentioned assistance, the government is also providing 1 crore for the testing phase and 75 lakh for technology transfer.The five-year plan seeks to accelerate technological innovations in satellite manufacturing, launch services, ground systems, and space applications, using the local ecosystem of ISRO facilities, research institutions, and talent pool in Bengaluru. This can be seen as the first of several steps taken by India joining the wave of the expanding space economy, which is characterized by a hefty private sector involvement after the reforms of 2020. IMRKARNATAKA EYES $5B SPACE INVESTMENT UNDER NEW TECH POLICY
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