India and Mexico have formally initiated negotiations for a Preferential Trade Agreement (PTA), marking a significant development in their bilateral economic partnership. The two countries have signed the Terms of Reference (ToR), establishing a structured framework for discussions to expand trade, facilitate investment, and strengthen cooperation across key industrial sectors.
The development follows an understanding reached between Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum during their meeting on the sidelines of the G7 Summit in Canada in June 2025, where both leaders expressed their commitment to deepening economic engagement.
The negotiations were formally launched during the visit of India’s Commerce Secretary, Rajesh Agrawal, to Mexico. Discussions were held with Mexico’s Undersecretary of Foreign Trade, Luis Rosendo Gutiérrez Romano, representing Economy Secretary Marcelo Ebrard Casaubon.
The Terms of Reference outline the scope and roadmap for negotiations, covering market access for goods, rules of origin, customs procedures, trade facilitation, dispute settlement mechanisms, technical barriers to trade, sanitary and phytosanitary measures, and trade remedies.
The proposed agreement is expected to create fresh opportunities for businesses in both countries by improving market access, promoting investment flows and supporting more diversified and resilient supply chains.
Both nations have identified several sectors with considerable potential for expanded cooperation, including automobiles, chemicals, electronics, pharmaceuticals, agri-food products, energy, critical minerals, medical devices and advanced manufacturing.
Mexico’s strategic position within global manufacturing and supply chains makes it an important commercial partner for Indian exporters and investors. At the same time, the proposed agreement could open new opportunities for Mexican businesses seeking greater access to India’s growing consumer and industrial markets.
The negotiations also assume significance against the backdrop of higher import tariffs introduced by Mexico on several product categories. A preferential trade arrangement could potentially improve the competitiveness of Indian products in the Mexican market, depending on the concessions agreed upon during negotiations.
Bilateral merchandise trade between India and Mexico stood at approximately USD 7.83 billion during FY 2025–26, with Indian exports accounting for around USD 5.73 billion. Automobiles remain among India’s major export categories to Mexico, highlighting the commercial importance of strengthening trade relations.
Beyond the proposed trade agreement, both delegations explored opportunities to encourage closer interaction between their respective business communities. Discussions included the possibility of organising a Mexican business delegation to India during the first quarter of 2027 to facilitate business-to-business meetings, identify investment prospects and promote industrial collaboration.
The launch of PTA negotiations reflects the growing importance of India–Mexico economic relations and the shared interest in developing a more diversified international trade partnership.
While the final scope and benefits of the proposed agreement will depend on the outcome of negotiations, the initiative represents an important step towards strengthening commercial engagement and creating new opportunities for businesses across both economies.
