India and Mexico signed the Terms of Reference for Preferential Trade Agreement negotiations during Commerce Secretary Rajesh Agrawal's visit to Mexico City, formally setting in motion talks that both sides hope will deliver an "early harvest" on tariff reductions. The ToR establishes the framework, scope, modalities, and roadmap for negotiations, covering 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 initiative traces its origins to a meeting between Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum on the sidelines of the G7 Summit in Canada in June 2025, where the two leaders agreed to deepen the India-Mexico economic partnership. Commerce Secretary Agrawal held discussions with Mexico's Undersecretary of Foreign Trade, Luis Rosendo Gutiérrez Romano, who represented Economy Secretary Marcelo Ebrard Casaubon .
From a logistics and trade facilitation standpoint, the inclusion of customs procedures and trade facilitation in the negotiating mandate is particularly significant. Both sides have acknowledged that simplifying clearance processes and enhancing transparency will directly reduce logistics time and costs for goods moving between the two countries. For Indian exporters shipping to Mexico—a market with strong linkages to global value chains and North American manufacturing networks—predictable and streamlined customs procedures could provide meaningful supply chain advantages .
The urgency of the negotiations is underscored by Mexico's tariff policy. Effective January 1, 2026, Mexico raised most-favoured-nation import tariffs from roughly 5 percent to as high as 50 percent on approximately 1,455 tariff lines, targeting imports from countries without free trade agreements—including India. India's Commerce Ministry estimated that these measures could affect around $2 billion worth of Indian exports, particularly in automobiles, auto parts, textiles, iron and steel, plastics, leather, and footwear .
Despite the tariff headwinds, India's exports to Mexico have demonstrated resilience, growing nearly 26 percent in the current financial year through August, according to Department of Commerce data. Bilateral merchandise trade stood at approximately $7.83 billion in 2025-26, with India recording a trade surplus of around $3.62 billion. Automobiles were India's largest export category to Mexico at roughly $1.92 billion, followed by auto components, pharmaceuticals, engineering goods, and chemicals. Crude oil accounted for about three-fourths of Mexico's shipments to India .
Sectors identified for potential cooperation under the proposed agreement include automotive, chemicals, electronics, pharmaceuticals, agri-food, energy, critical minerals, medical devices, and advanced manufacturing. Indian IT and pharmaceutical companies already have a substantial presence in Mexico, while 17 major Mexican companies operate in India, including Nemak, Metalsa, Mexichem, Cinepolis, and Kidzania. Mexican IT firm Softtek became the first Latin American company to establish a service presence in India .
Commerce Minister Piyush Goyal indicated that Mexico is "very keen to have an early harvest," suggesting both sides may pursue an interim agreement that reduces or eliminates duties on goods where neither side has major sensitivities, without waiting for a comprehensive deal. This approach could deliver quicker relief for exporters facing the new tariff regime while broader negotiations continue .
The two delegations also discussed the possibility of organizing a Mexican business mission to India in the first quarter of 2027 to facilitate business-to-business meetings and identify commercial opportunities. The PTA with Mexico forms part of India's broader strategy to diversify export markets and expand its footprint in Latin America, alongside ongoing negotiations with Chile, Peru, and the Mercosur bloc .