The two countries have signed the terms of reference (ToR) to formally launch the talks. The ToR outline broad contours of the pact.
The negotiating areas include 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.
It was signed in the presence of Commerce Secretary Rajesh Agarwal.
Read more: India, Mexico sign terms of reference to kickstart trade pact negotiations
“Mexico and India take an important step towards strengthening their economic and trade relations with the signing of the Terms of Reference for negotiations on a Preferential Trade Agreement (PTA), which establishes the framework, scope, modalities and roadmap for negotiations aimed at creating new economic opportunities for both countries,” the ministry said in a statement.
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, it said.The ministry added that the proposed agreement seeks to leverage the complementarities between the two economies and expand opportunities for Mexican products and businesses in the Indian market.
Read more: India to emerge as major exporter to China, ASEAN, get edge in US trade pact, says Piyush Goyal
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.
Both sides also discussed the possibility of organising a Mexican business mission to India during the first quarter of 2027. The proposed mission would facilitate business-to-business meetings, help identify commercial opportunities and strengthen commercial ties between the productive sectors of the two countries.
The bilateral trade between the two countries dipped 9.11 per cent to USD 7.83 billion (exports USD 5.72 billion and imports USD 2.1 billion) in 2025-26 as against USD 8.61 billion in 2024-25. India had a trade surplus of USD 3.62 billion in the last fiscal as against USD 2.9 billion in 2024-25.
India’s major exports to Mexico include automobiles and auto components, pharmaceuticals, engineering goods and chemical products. India mainly imports crude oil, which accounts for 75 per cent of the export basket from Mexico. Other products exported to India are gold and related jewellery, chemical compounds and telephone machinery.
New Delhi is a major investor in Mexico City in sectors such as information technology, pharmaceutical and automotive sectors. Almost all major Indian IT and ICT companies (TCS, HCL, Infosys, Tech Mahindra, First Source, Cognizant, NIIT, Aptech, Hexaware, Wipro, BirlaSoft, and Zoho) have operations in Mexico.
Several Indian pharmaceutical firms (Lupin, Dr Reddy’s Laboratories, Zydus, Claris, Life Sciences, Hetero Drugs, and Sun Pharma) have investments and operations in Mexico.
From the Mexican side, 17 major companies have a presence in India. Leading Mexican companies like Nemak, Metalsa, Mexichem, Great Foods & Beverages, RuhrPumpen, Cinepolis and Kidzania have invested in India in recent times.
Mexican IT company Softtek became the first Latin American company to have a presence in India as a service provider. Cinepolis has opened over 350 screens all over India, penetrating tier 2 cities as well.
India has received USD 354.44 million in foreign direct investment (FDI) from Mexico during April 2000 and June 2026.
Mexico is an important export market for India, besides a gateway to North America. A trade pact will help Indian exporters diversify trade amid global tariff uncertainty and supply-chain realignment.
The proposed preferential trade agreement (PTA) could help Indian exporters retain competitiveness, protect market access and expand business in a major Latin American economy. In a PTA, two trading partners reduce and eliminate import duties on a specified number of goods.
The PTA is also important as Mexico, from January 1 this year, steeply hiked import tariffs – ranging from about 5 per cent to as high as 50 per cent – on a wide range of goods (about 1,463 tariff lines) from countries that do not have free trade agreements with the South American nation. These countries include India, China, South Korea, Thailand and Indonesia.
The measures are expected to affect Indian products, including automobiles, textiles, footwear, chemicals and engineering goods.
According to trade experts, a PTA could secure lower duties on selected products and help Indian exporters compete with suppliers enjoying preferential access.
India has implemented seven free trade agreements with the UAE, Mauritius, Australia, the EFTA bloc, the UK, Oman and New Zealand in the last about five years. A comprehensive pact with the 27-nation European Union will be signed in December.
These pacts would help the country diversify its export basket, integrate with global supply chains and provide a cushion against escalating global trade uncertainties.