India, Mexico formally begin preferential trade agreement negotiations

The proposed agreement will cover market access, rules of origin, customs procedures and trade remedies as India looks to deepen its trade footprint in Latin America

India and Mexico have launched negotiations for a preferential trade agreement (PTA) after signing the terms of reference (ToR) for the proposed deal, the Department of Commerce said on Wednesday.

 

“The signing formally launches negotiations for a mutually beneficial and balanced PTA, with the potential to expand bilateral trade, create business opportunities, enhance investment flows and contribute to resilient and diversified supply chains,” the department said in a press release.

 

The signing of the ToR and launch of negotiations were part of Commerce Secretary Rajesh Agrawal’s two-day visit to Mexico City, which began on Tuesday.

 

The two sides had finalised the ToR more than three months ago and were awaiting an appropriate time to schedule the visit and formal signing.

 

 

“During the visit of Commerce Secretary, Rajesh Agrawal, both delegations discussed bilateral relations and opportunities to expand trade and investment flows,” the release said.

 

“The discussions were held with Mexico’s Undersecretary of Foreign Trade, Luis Rosendo Gutiérrez Romano, who participated on behalf of Secretary of Economy Marcelo Ebrard Casaubon.”

 

The ToR for a trade agreement serves as a formal roadmap setting out the boundaries, objectives, scope and rules before official negotiations begin.

 

The India-Mexico ToR covers key negotiating areas, including market access for goods, rules of origin, customs procedures and trade facilitation, dispute settlement, sanitary and phytosanitary measures, technical barriers to trade and trade remedies.

 

The proposed deal seeks to leverage complementarities between the two economies and expand opportunities for Mexican products and businesses in the Indian market.

 

“With its strong linkages to global value chains, Mexico is an important market for Indian exporters and investors. Sectors with significant potential for cooperation include automotive, chemicals, electronics, pharmaceuticals, agri-food, energy, critical minerals, medical devices, and advanced manufacturing, among others,” the release said.

 

New Delhi initiated discussions for a trade agreement with Mexico after the latter imposed tariffs of as much as 50 per cent on more than 1,400 products from non-preferential trading partners, including India.

 

Despite the tariffs, India’s exports to Mexico have grown nearly 26 per cent so far in the current financial year through August, according to the latest data available with the Department of Commerce.

 

India exported goods worth $5.73 billion to Mexico in 2025-26 (FY26), with nearly half of the shipments comprising vehicles and auto components, and electrical machinery and equipment.

 

India recorded a trade surplus of $3.63 billion with Mexico during the year.

 

The proposed agreement with Mexico is part of India’s broader strategy to diversify export markets and expand its footprint in Latin America.

 

The Department of Commerce is also engaged in trade agreement negotiations with other economies in the region, including Chile and Peru, as well as the Brazil-led five-member Mercosur bloc.