India and Mexico Kick Off Preferential Trade Agreement Talks to Boost Economy
India and Mexico begin negotiations for a Preferential Trade Agreement to boost investment, trade, and supply chains across key sectors.
In a strategic move to revitalize economic ties and unlock untapped potential, India and Mexico have formally launched negotiations for a Preferential Trade Agreement (PTA). This landmark initiative is designed to expand bilateral trade, attract fresh investments, and fortify supply chains between the two nations.
The process officially began with the signing of the Terms of Reference (ToR), a critical document that outlines the framework, scope, modalities, and the roadmap for the upcoming negotiations. The agreement was signed by India's Commerce Secretary Rajesh Agrawal and Mexico's Undersecretary of Foreign Trade, Luis Rosendo Gutiérrez Romano, as confirmed by the Ministry of Commerce and Industry.
The Road to Economic Synergy
The momentum for this agreement gained pace following a high-level meeting between Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum during the G7 Summit in Canada in June 2025. Both leaders expressed a shared vision to deepen their partnership, leading to the current push for a balanced and mutually beneficial trade framework.
The proposed PTA is not just about lowering tariffs; it is a comprehensive approach to economic integration. The negotiating framework specifically covers several key pillars:
- Market Access: Improving the flow of goods between the two nations.
- Customs and Facilitation: Streamlining customs procedures and trade facilitation to reduce bottlenecks.
- Regulatory Standards: Addressing sanitary and phytosanitary measures, as well as technical barriers to trade.
- Legal Frameworks: Establishing clear rules of origin and robust dispute settlement mechanisms.
- Trade Remedies: Implementing measures to ensure fair trade practices.
Target Sectors for Growth
India and Mexico aim to leverage the complementarities of their respective economies. For India, Mexico serves as a gateway to global value chains, making it an indispensable market for exporters and investors. Conversely, Mexico looks to expand the footprint of its products and businesses within the vast Indian market.
Several high-growth sectors have been identified for potential cooperation, including:
- Automobiles and Advanced Manufacturing
- Pharmaceuticals and Medical Devices
- Electronics and Energy
- Chemicals and Critical Minerals
- Agri-food products
Bridging the Trade Gap
The push for a PTA comes at a time when bilateral trade has seen a dip. According to recent trade data, India-Mexico trade stood at USD 7.83 billion in 2025-26, marking a 9.11 per cent decline from the USD 8.62 billion recorded in 2024-25.
A closer look at the numbers reveals that India's exports to Mexico saw a marginal decline of 0.38 per cent, falling to USD 5.73 billion. However, imports from Mexico experienced a sharper drop of 26.59 per cent, landing at USD 2.11 billion. The new agreement is seen as a vital tool to reverse this trend and create a sustainable upward trajectory for trade.
Future Outlook and Business Missions
The Indian Embassy in Mexico described the signing of the ToR as a "decisive step towards a stronger economic partnership" via a post on X. The embassy emphasized the ambition to turn untapped potential into tangible economic benefits through ambitious negotiations.
To further cement these ties, both countries are discussing the organization of a Mexican business mission to India, tentatively planned for the first quarter of 2027. This mission is expected to facilitate direct business-to-business (B2B) meetings, helping companies from both sides identify concrete commercial opportunities and strengthen their professional networks.