India and Mexico Launch Talks for a Preferential Trade Agreement
India and Mexico signed the Terms of Reference (ToR) to formally start negotiations on a Preferential Trade Agreement (PTA). A ToR is the agreed rulebook for the talks: what will be negotiated and how.
The signing took place during the official visit of India's Commerce Secretary to Mexico. Mexico was represented by its Deputy Minister of Foreign Trade. India's Commerce Ministry announced the launch on 28 October 2026.
The talks will cover market access for goods, rules of origin, customs procedures and trade facilitation, dispute settlement, sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT) and trade remedies.
Focus sectors include automobiles, chemicals, electronics, pharmaceuticals, agri-food, energy, critical minerals, medical devices and advanced manufacturing. Both sides also discussed a Mexican business mission to India in the first quarter of 2027.
Background: from 1 January 2026, Mexico raised import duties by about 5% to 50% on more than 1,400 tariff lines from countries that have no trade agreement with it, including India. Indian cars, auto parts, textiles, footwear, steel and chemicals were hit. A PTA could win back lower duties for these goods.
Bilateral trade in 2025-26 was about USD 7.83 billion, down about 9% from USD 8.61 billion in 2024-25. India exported about USD 5.72 billion and imported about USD 2.1 billion, mostly crude oil.
Free Trade Agreements: Concept and WTO Framework
A trade agreement is a deal between countries to make trade between them cheaper and easier, mainly by cutting import taxes (tariffs). Agreements come in levels. A Preferential Trade Agreement (PTA) is the lightest level: each side cuts duties on a limited list of products only. A Free Trade Agreement (FTA) goes further and removes duties on most of the trade. Deeper deals like a CEPA also cover services, investment and other areas.
India and Mexico chose a PTA instead of a full FTA because it can be agreed faster. The aim is to quickly win lower Mexican duties for Indian goods hit by the January 2026 tariff increase. A PTA can later be widened into a fuller deal, as India and Chile are doing.
Rules of Origin (RoO)
Rules of origin are the tests that decide which country a product "comes from". This matters because trade-deal benefits go only to goods that truly come from the partner country. Without these rules, a third country could send its goods through the partner and enjoy lower duties without being part of the deal. Rules of origin stop this "back-door" entry.
Rules of origin are one of the named chapters of the India-Mexico talks. Mexico will want to ensure that only genuinely Indian goods get the lower duties, and not goods from other Asian countries routed through India. India will want rules that its exporters, such as auto-parts makers, can realistically meet.
Non-Tariff Barriers (NTBs): Types and the WTO Framework
Non-tariff barriers are ways of blocking or slowing imports without charging a duty. They include health and safety rules, product standards, testing and labelling rules, licences and quotas. Many such rules have genuine aims, like protecting health, but they can also be used to keep foreign goods out. So the WTO has agreements that let countries make such rules but require them to be fair and based on evidence.
The India-Mexico ToR lists SPS measures, TBT and trade remedies as negotiating areas. This means the PTA will not only cut duties but also try to ease standards and testing hurdles, which matter a lot for Indian pharmaceuticals, agri-food and auto parts.
- India-Mexico Terms of Reference for a Preferential Trade Agreement signed; launch announced on 28 October 2026
- Negotiating areas: goods market access, rules of origin, customs procedures and trade facilitation, dispute settlement, SPS, TBT, trade remedies
- Mexican business mission to India planned for the first quarter of 2027
- Mexico's tariff increase from 1 January 2026: about 5% to 50% on more than 1,400 tariff lines from non-FTA partners
- India-Mexico trade 2025-26: about USD 7.83 billion (India's exports about USD 5.72 billion; imports about USD 2.1 billion)
- Crude oil makes up about 75% of Mexico's exports to India
- FDI from Mexico into India, April 2000 to June 2026: about USD 354 million
- India's PTAs: India-Chile (2006, expanded 2016), India-MERCOSUR (in force 2009)