India and Mexico have formally launched negotiations for a Preferential Trade Agreement (PTA), aiming to expand bilateral trade, strengthen investment flows and improve market access amid rising global trade uncertainties.
The two countries signed the Terms of Reference (ToR) on Wednesday in the presence of Commerce Secretary Rajesh Agarwal, establishing the framework and roadmap for negotiations. Discussions will cover market access for goods, rules of origin, customs procedures, trade facilitation, dispute settlement and other trade-related measures.
Bilateral trade declined 9.11% to US$7.83 billion in FY2025-26, from US$8.61 billion in the previous fiscal. India recorded a trade surplus of US$3.62 billion during the year.
India’s major exports to Mexico include automobiles and components, pharmaceuticals, engineering goods and chemicals, while imports are dominated by crude oil. Other areas offering cooperation include electronics, medical devices, agrifood, energy, critical minerals and advanced manufacturing.
The proposed pact assumes added significance following Mexico’s decision to impose higher import tariffs, ranging from 5% to 50%, on around 1,463 tariff lines from countries without free trade agreements, including India. The measures could affect Indian exports of automobiles, textiles, footwear, chemicals and engineering products.
A PTA could help Indian exporters secure preferential duties on selected products, maintain competitiveness and strengthen Mexico’s position as a gateway to North American markets. Both countries are also considering a Mexican business mission to India in the first quarter of 2027 to facilitate business meetings and identify new commercial opportunities.
With established business links across information technology, pharmaceuticals and automotive manufacturing, the two economies see scope to deepen cooperation and build more diversified, resilient supply chains through the proposed agreement.