India and Mexico have formally started negotiations for a Preferential Trade Agreement (PTA) after signing the Terms of Reference in Mexico City. The move is expected to improve market access, encourage investment, and create new opportunities for businesses in both countries.
What the agreement means
A Preferential Trade Agreement is a trade arrangement under which selected goods receive lower tariffs or other benefits. The India-Mexico PTA is expected to support stronger bilateral trade, resilient supply chains, and closer commercial cooperation.
The Terms of Reference set out the framework, scope, process, and roadmap for the negotiations. They cover market access for goods, rules of origin, customs procedures, trade facilitation, dispute settlement, sanitary and phytosanitary measures, technical barriers to trade, and trade remedies.
Who signed the document
India’s Commerce Secretary, Rajesh Agrawal, signed the Terms of Reference during his official visit to Mexico. Mexico was represented by Luis Rosendo Gutiérrez Romano, Undersecretary of Foreign Trade, on behalf of Economy Secretary Marcelo Ebrard Casaubon.
The decision follows an understanding between Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum during the G7 Summit in Canada in June 2025, where both leaders agreed to deepen the India-Mexico partnership.
Key sectors in focus
The proposed agreement could benefit several sectors with strong growth potential, including:
- Automotive
- Chemicals
- Electronics
- Pharmaceuticals
- Agri-food
- Energy
- Critical minerals
- Medical devices
- Advanced manufacturing
Mexico’s strong links with global value chains make it an important market for Indian exporters and investors. The talks also aim to expand opportunities for Mexican products and companies in India.
Mexico business mission planned
Both countries also discussed a possible Mexican business mission to India in the first quarter of 2027. The mission is expected to arrange business-to-business meetings, identify commercial opportunities, and build stronger links between companies in both markets.
Why it matters
The India-Mexico Preferential Trade Agreement could reduce trade barriers and make it easier for exporters to enter each other’s markets. It may also help both countries diversify supply chains and attract more investment in high-value sectors.
For India, the negotiations are an important step in expanding its trade presence in Latin America. For Mexico, the agreement offers a route to deeper engagement with one of the world’s fastest-growing major economies.
The signing of the Terms of Reference does not complete the trade agreement, but it formally begins the process. The next stage will involve detailed negotiations on the products, rules, and benefits that will form part of the final India-Mexico PTA.
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