India and Mexico have taken a formal step towards expanding their economic partnership by signing the Terms of Reference for negotiations on a Preferential Trade Agreement. The signing took place on October 28, 2026, formally setting the framework for negotiations between the two countries.
India’s Commerce Secretary Rajesh Agrawal and Mexico’s Undersecretary of Foreign Trade, Luis Rosendo Gutiérrez Romano, signed the framework. It outlines the scope, negotiating areas and roadmap for the proposed agreement.
The proposed PTA is intended to create additional opportunities for businesses in both countries by addressing trade barriers, improving market access and supporting investment. The negotiations are expected to cover trade in goods, rules of origin, customs procedures, trade facilitation, dispute settlement, sanitary and phytosanitary measures, technical barriers to trade and trade remedies.
Sectors in focus
Several sectors have been identified as potential areas for stronger commercial cooperation. These include automobiles and auto components, chemicals, electronics, pharmaceuticals, textiles, footwear, plastics, steel, agri-food, energy, critical minerals, medical devices and advanced manufacturing. The final scope and concessions will depend on the outcome of negotiations.
Editorial Analysis
Why This Matters
Market access for exporters: The negotiations could create opportunities for Indian businesses seeking to expand sales in Mexico. The actual benefits will depend on the products included and the tariff terms eventually agreed. Investment and business partnerships: A more predictable trade framework could encourage companies to explore investment, manufacturing and distribution partnerships across the two markets. Supply-chain diversification: Stronger economic links could help businesses develop alternative sourcing and export routes, although such outcomes would depend on commercial decisions and the final agreement. Implications for consumers: If the countries eventually reduce selected trade barriers, some goods could become more competitive. Any effect on prices or product availability remains uncertain until the terms are known.
Mexico is an important market for Indian exporters, including vehicle manufacturers and suppliers. Indian merchandise exports to Mexico were reported at approximately US$5.73 billion in the 2025–26 financial year, with automobiles forming a major part of the export basket.
The negotiations also come amid changes in Mexico’s tariff regime affecting imports from countries without preferential trade arrangements. Indian exporters have an interest in securing predictable market access, although the proposed PTA does not yet guarantee tariff reductions for any specific product.
A wider economic partnership
The initiative 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. The two leaders had agreed to strengthen bilateral relations and explore opportunities for closer economic cooperation.
The delegations have also discussed the possibility of a Mexican business mission to India in the first quarter of 2027. If organised, the visit could help businesses identify partners, explore investment opportunities and build commercial links. The mission remains a proposal rather than a confirmed event.
The next stage will involve negotiations on the terms of the proposed agreement. Any eventual benefits for exporters, consumers or investors will depend on the final text, the products covered and the implementation arrangements agreed by both governments.
