India and Mexico Launch PTA Negotiations

India and Mexico formally launched negotiations for a Preferential Trade Agreement (PTA) after signing the Terms of Reference (ToR) in Mexico City on 26 October 2026. The signing took place during the visit of India’s Commerce Secretary Rajesh Agrawal. The proposed agreement follows an understanding reached by Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum at the G7 Summit in Canada in June 2025.

Preferential Trade Agreements

A Preferential Trade Agreement provides tariff concessions on selected goods traded between participating countries. Its coverage is generally narrower than that of a free trade agreement, which can cover a wider range of goods and services. The ToR sets out the framework, scope, negotiating modalities and roadmap for the India–Mexico negotiations. Mexico’s tariffs of up to 50% on 1,463 items from countries without bilateral trade agreements took effect on 1 January 2026. The proposed PTA is intended to address the effect of these tariffs on Indian exports, including automobiles, textiles, footwear, plastics, steel, chemicals and toys.

Trade Profile and Negotiating Framework

Bilateral merchandise trade between India and Mexico was approximately US7.83 billion in fiscal year 2025–26. India exported goods worth US5.73 billion to Mexico during that period, including automobiles valued at US$1.92 billion. Mexico has expressed interest in an “early harvest” arrangement, which would liberalise trade in selected goods before the full negotiations conclude. The ToR includes negotiations on market access for goods, rules of origin, customs procedures and trade facilitation. It also covers dispute settlement, sanitary and phytosanitary measures, technical barriers to trade and trade remedies. Rules of origin determine the national source of a product for applying tariff preferences, while sanitary and phytosanitary measures address food safety and animal and plant health requirements.

Commercial Engagement

Discussions included the possibility of a Mexican business mission to India in the first quarter of 2027 to facilitate trade and investment. The PTA negotiations cover goods trade and related customs, regulatory and dispute-settlement matters.

Important Facts for Exams

• The India–Mexico Terms of Reference were signed in Mexico City on 26 October 2026.
• India’s merchandise exports to Mexico totalled US$5.73 billion in fiscal year 2025–26.
• Automobiles accounted for US$1.92 billion of India’s exports to Mexico in fiscal year 2025–26.
• Mexico’s tariffs on 1,463 items from countries without bilateral trade agreements took effect on 1 January 2026.

The G7 Summit meeting between Narendra Modi and Claudia Sheinbaum took place in Canada in June 2025. The proposed Mexican business mission to India was discussed for the first quarter of 2027.