Negotiations for Preferential Trade Agreement between India and Mexico have commenced

India and Mexico have officially commenced negotiations for a Preferential Trade Agreement (PTA) to promote bilateral trade and investment. According to a press statement from the Ministry of Commerce, both countries have signed the 'Terms of Reference' defining the scope and framework of the negotiations. This move is part of India's broader efforts to enter into bilateral trade agreements to boost exports amidst the restructuring of global supply chains.

The primary objective of this proposed agreement is to create new economic opportunities, increase investment flows, and strengthen supply chains by leveraging the complementarities between the two economies. The framework of the negotiations includes critical issues such as 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 Ministry of Commerce stated.

Looking at the trade figures, according to a report by Mint, the bilateral merchandise trade between the two countries in FY 2026 was approximately $7.83 billion. During this period, India maintained a trade surplus of approximately $3.62 billion in its trade with Mexico. In FY 2026, India's export value to Mexico stood at $5.73 billion, which was a 0.38% decrease compared to the previous year. On the other hand, India's imports from Mexico also declined by 26.59% to $2.11 billion.

Automobiles remained the largest sector in India's exports, valued at approximately $1.92 billion. Additionally, auto components, pharmaceuticals, engineering goods, and chemicals were also included among the significant export categories. In imports coming to India from Mexico, crude oil accounted for almost three-fourths of the share.

This initiative follows the understanding reached between Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum to deepen bilateral relations during the G-7 Summit in Canada in June 2025. A meeting was held between officials of both countries during the visit of Commerce Secretary Rajesh Agrawal to Mexico to discuss the expansion of trade and investment. Agrawal held discussions with Mexico's Undersecretary of Foreign Trade Luis Rosendo Gutierrez Romano, who was representing Secretary of Economy Marcelo Alvarado Casabon.

As Mexico is integrated with global value chains, it remains a significant market for Indian exporters and investors. Both countries have identified sectors such as automobiles, chemicals, electronics, pharmaceuticals, agri-food, energy, critical minerals, medical devices, and advanced manufacturing for potential cooperation.

To further strengthen commercial ties, both parties also discussed the possibility of sending a Mexican Business Mission to India in the first quarter of 2027. According to a report by The Economic Times, the proposed mission aims to organize business-to-business meetings, identify commercial opportunities, and strengthen business relations between the productive sectors of both countries.

These negotiations are a step towards a comprehensive economic partnership, with both sides seeking to enhance market opportunities and strengthen commercial connectivity.