India-Mexico preferential trade agreement negotiations set to formally begin

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Commerce Secretary is in Mexico City to sign the terms of reference (ToR) for the pact

By BL New Delhi Bureau

Updated - October 27, 2026 at 12:26 PM. | New Delhi

India and Mexico are set to formally launch negotiations for a bilateral preferential trade agreement (PTA) this week, seeking to mitigate the impact of Mexico’s higher import tariffs, of up to 50 per cent, imposed on more than 1,400 products affecting countries without trade agreements, including India, from January 1, 2026.

Commerce Secretary Rajesh Agrawal is in Mexico City for a two-day visit to sign the Terms of Reference (ToR), which will formally set the framework for negotiations. The proposed agreement is expected to cover a limited range of goods and help Indian exporters secure preferential market access to Mexico.

“Arrived in Mexico City for a two-day visit to advance India–Mexico trade and economic ties. The visit will see the launch of PTA negotiations with the signing of the Terms of Reference (ToR), alongside engagements with the Mexican government and business community to deepen bilateral cooperation,” Agrawal said in a post on X on Tuesday.

Mexico’s tariff increases, effective January 1, cover products across 1,463 tariff classifications, with duties ranging from 5 per cent to 50 per cent. The measures affect several key Indian export sectors, including automobiles and auto components, textiles and apparel, footwear, plastics, steel, chemicals, household appliances, aluminium, toys and engineering goods.

Passenger vehicle import duties, for instance, have risen to up to 50 per cent, posing a significant challenge for Indian automakers that use Mexico as an important export market. Engineering goods account for a substantial share of India’s shipments to the country.

India’s merchandise exports to Mexico stood at $5.73 billion in 2025-26, with automobiles accounting for about $1.92 billion. Total bilateral merchandise trade was around $7.83 billion during the year.

The tariff increases are part of Mexico’s efforts to strengthen domestic manufacturing, increase local content in production chains and protect employment. The higher duties have prompted India to pursue a trade arrangement that could restore competitiveness for its exporters.

Unlike a comprehensive free trade agreement, a PTA provides tariff concessions on a selected list of products. It is, therefore, relatively easier to negotiate and secure.

Published on October 27, 2026

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