India and Mexico have begun talks for a free trade agreement (FTA) to resolve issues arising out of the new tariffs imposed by Mexico, and terms of reference for the pact are expected to be firmed up soon, officials said.
The development comes as Mexico has announced up to 50% tariffs on imports from non-preferential trade partners, including India, from January 1 next year. “India is already engaged with Mexico for a trade agreement. The terms of reference could be finalised soon,” said an official, who did not wish to be identified. Mexico reached out to India for a pact to strengthen bilateral trade relations and initial discussions have been held, according to the official. The terms of reference set the framework and scope for the FTA negotiations.
Mexico had first introduced the proposal in September to support local production and reduce trade imbalances but later deferred it to August 2026, after concerns were raised by non-FTA partners including India and by Mexican industry groups. However, the proposal was resubmitted on December 3, accelerating the legislative process.
In September, India had sought special concessions to shield its exports from the new tariffs, said people aware of the matter. “The two sides are exploring mutually beneficial solutions which align with global trade rules,” the official said, adding that India reserves the right to take appropriate measures to safeguard the interests of its exporters. Commerce secretary Rajesh Agrawal has held a meeting with Mexico’s vice minister of economy Luis Rosendo on the issue and follow-on technical meetings are expected soon, according to the official.
“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,” said another official. Exporters said industry has been pushing for a trade deal with Mexico for some time to benefit from the United States-MexicoCanada Agreement (USMCA).
