India-Mexico trade talks move ahead with ToR signing; autos, pharma, electronics in focus

India and Mexico have formally launched negotiations for a preferential trade agreement (PTA), with the two countries signing the terms of reference for the proposed pact, the commerce ministry said on Wednesday.

The terms of reference (ToR) establish the framework, scope and roadmap for negotiations covering areas such as market access for goods, rules of origin, customs procedures, trade facilitation and dispute settlement.

According to the commerce ministry, the proposed agreement also covers sanitary and phytosanitary measures, technical barriers to trade and trade remedies.

The signing of the ToR formally launches negotiations for a mutually beneficial and balanced agreement that could expand bilateral trade, create business opportunities, enhance investment flows and strengthen supply chains, the ministry said in a statement.

The development follows an understanding reached between Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum during their meeting on the sidelines of the G7 Summit in Canada in June 2025 to deepen bilateral ties.

Commerce Secretary Rajesh Agrawal was on a two-day visit to Mexico City to advance trade and economic relations between the two countries.

During the visit, the Indian delegation held discussions with Mexico's Undersecretary of Foreign Trade, Luis Rosendo Gutierrez Romano, who represented Economy Secretary Marcelo Ebrard Casaubon.

The discussions focused on opportunities to expand trade and investment flows and strengthen cooperation between the two countries' businesses.

The ministry said the proposed agreement seeks to leverage complementarities between the two economies and expand opportunities for Mexican products and businesses in the Indian market.

Automobiles, chemicals, electronics, pharmaceuticals, agri-food, energy, critical minerals, medical devices and advanced manufacturing are among the sectors with potential for greater cooperation.

The two sides also discussed the possibility of organising a Mexican business mission to India in the first quarter of 2027.

The proposed visit would facilitate business-to-business meetings, help identify commercial opportunities and strengthen commercial ties between businesses in the two countries.

Bilateral trade between India and Mexico declined by over 9% to $7.83 billion in 2025-26. India's exports stood at $5.72 billion, while imports were $2.1 billion, leaving the trade balance in India's favour.

India has been pursuing trade agreements with several countries and regional groupings to expand market access for domestic exporters and diversify its economic partnerships.

Commerce and Industry Minister Piyush Goyal said on Tuesday that negotiations with Chile were at an advanced stage, while talks with Canada were making good progress.

India has also started negotiations for a preferential trade agreement with the five-member Southern African Customs Union (SACU), comprising Botswana, Eswatini, Lesotho, Namibia and South Africa.

Goyal said negotiations with the South Africa-led grouping could take some time as they had only recently begun.

"I can see Chile's quite ripe for conclusion; Canada is making very good progress. We have just started SACU negotiations, so it may take some time (for conclusion)," Goyal told reporters during his Hague visit.

India is also looking to expand its existing preferential trade agreement with the South American trade bloc Mercosur, which comprises Brazil, Argentina, Bolivia, Uruguay and Paraguay.

The India-Mercosur PTA came into effect on June 1, 2009, and provides preferential tariff concessions on 450 product categories for India and 452 for the bloc. Both sides are now seeking to widen the scope of the agreement.

Negotiations with the Gulf Cooperation Council (GCC) and Israel have progressed slowly amid the West Asia crisis, Goyal said, adding that India was ready to accelerate the talks.

India has existing trade agreements with the United Arab Emirates and Oman, both members of the six-nation GCC.

India has also received proposals from Ecuador, Egypt and other African countries to explore trade agreements.

India's trade agreement with the United Kingdom, the Comprehensive Economic and Trade Agreement, came into force on July 15. The pact was concluded on May 6, 2025, following 14 rounds of negotiations and signed in London on July 24, 2025.

The free trade agreement with New Zealand, signed in April, also came into force earlier this month, providing duty-free access to 100% of Indian exports to the Pacific nation.

New Zealand had earlier imposed peak tariffs of up to 10% on several Indian exports, including ceramics, carpets, automobiles and auto components.