India and Mexico are moving closer to a proposed preferential trade agreement, with the two countries expected to sign the Terms of Reference (ToR) for negotiations in early October, according to reports.
The proposed pact could improve market access for Indian exporters by addressing areas including trade in goods, rules of origin, customs procedures, trade facilitation, sanitary and phytosanitary measures, technical barriers and dispute settlement.
Automobiles and auto components are among India’s leading exports to Mexico, while pharmaceuticals, engineering goods and chemicals are also important export categories. Indian pharmaceutical companies already have a presence in Mexico, creating a base for further expansion if market-access conditions improve.
The proposed agreement comes as Mexico has increased tariffs on imports from countries without preferential trade agreements. According to Commerce Ministry data cited in the report, India’s exports to Mexico were $5.73 billion in 2025–26, while bilateral trade stood at $7.83 billion.
Mexico is also viewed as an important gateway to Latin American and North American supply chains, potentially offering Indian companies opportunities to diversify export markets and strengthen their manufacturing and investment presence.
For Indian exporters, improved tariff and non-tariff market access could create additional opportunities in automobiles, pharmaceuticals, engineering products and other manufactured goods as negotiations progress.