India and Mexico signed the terms of reference in New Delhi on June 28, 2025, formally starting negotiations for a preferential trade agreement. The move followed an understanding reached by Prime Minister Narendra Modi and President Claudia Sheinbaum at the G7 summit in Canada last month, as Commerce Secretary Rajesh Agrawal posted on social media. The reference outlines a timetable, with the first round of talks slated for September and a draft agreement expected in December.
Mexico has recently raised import duties on more than 1,400 products from countries without free‑trade agreements to as high as 50%. Indian exports to Mexico totaled $5.7 billion last financial year, with automobiles and auto parts accounting for roughly $1.5 billion. The new pact aims to lower those steep tariffs and widen market access for Indian firms.
The negotiations will cover expanding trade, facilitating investment and strengthening supply‑chain linkages across sectors such as automotive, agriculture and pharmaceuticals. Both sides say the agreement will leverage the complementary strengths of their economies, boosting competitiveness and creating new opportunities for exporters and investors alike.
For many small‑scale Indian exporters, the current tariff regime poses a significant hurdle. The agreement could reduce costs for firms that produce on a modest scale, enabling them to compete more effectively in Mexico’s market. This shift is expected to benefit thousands of businesses that rely on cross‑border trade.
The first round of talks will begin in September, with a draft agreement to be presented in December. If the draft is approved, the pact could come into force early next year, potentially raising Indian exports to Mexico by an estimated 20‑30 percent.