New Delhi: India and Mexico on Wednesday launched negotiations for a Preferential Trade Agreement (PTA) aimed at expanding bilateral commerce and boosting investment flows, the commerce and industry ministry said.
The two countries have signed the Terms of Reference (ToR) to formally launch the talks. The ToR outlines the 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.
The ToR was signed in the presence of Commerce Secretary Rajesh Agarwal.
"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.
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 automobiles, 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.
Bilateral trade between the two countries dipped 9.11 per cent to $7.83 billion (exports of $5.72 billion and imports of $2.1 billion) in 2025-26 compared with $8.61 billion in 2024-25. India had a trade surplus of $3.62 billion in the last fiscal year, compared with $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 Mexico's exports to India. Other products exported to India are gold and related jewellery, chemical compounds and telephone machinery.
Indian companies have significant investments in Mexico in sectors such as information technology, pharmaceuticals and automobiles. Almost all major Indian IT and ICT companies (TCS, HCL, Infosys, Tech Mahindra, Firstsource, Cognizant, NIIT, Aptech, Hexaware, Wipro, Birlasoft and Zoho) have operations in Mexico.
Several Indian pharmaceutical firms (Lupin, Dr Reddy's Laboratories, Zydus, Claris Lifesciences, Hetero Drugs and Sun Pharma) have investments and operations in Mexico.
On the Mexican side, 17 major companies have a presence in India. Leading Mexican companies such as Nemak, Metalsa, Mexichem, Great Foods & Beverages, Ruhrpumpen, Cinépolis 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. Cinépolis has opened over 350 screens across India, including in tier-two cities.
India has received $354.44 million in Foreign Direct Investment (FDI) from Mexico between April 2000 and June 2026.
Mexico is an important export market for India, besides being a gateway to North America. A trade pact will help Indian exporters diversify their trade amid global tariff uncertainty and supply-chain realignment.
The proposed PTA could help Indian exporters retain competitiveness, protect market access and expand business in a major North American economy. In a PTA, two trading partners reduce or eliminate import duties on a specified number of goods.
The PTA is also important as Mexico has, since January 1 this year, steeply hiked import tariffs — ranging from about five 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 Mexico. 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 approximately the last five years. A comprehensive pact with the 27-nation European Union (EU) 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.