India and Mexico to Launch Trade Deal Talks This Week Amid Fresh 50% US Tariffs on Indian Exports

The terms of reference (ToR) are to be signed this week between India and Mexico for a preferential trade agreement (PTA) to safeguard India's exports from being affected by some additional high tariffs recently imposed in the Mexican market, officials said.

The agreement is likely to include some of the major Indian exports such as automobiles, footwear, plastics, chemicals, steel and toys which are subjected to tariff rates of up to 50% under Mexico's new regime.

The two countries have agreed the terms of reference and hope they sign the document in the coming days, the officials said, speaking on condition of anonymity. Commerce secretary Rajesh Agrawal is in Mexico starting Monday on his trade mission, which is set for a week-long visit to include Brussels, the European Union's headquarters.

Also Read: Manoj Tapadia on Filmmaking: Why a Strong Screenplay Is Essential for a Successful Movie

The proposed India-Mexico PTA is likely to benefit Indian exporters from the effects of the Mexican government's hike in tariff rates on 1,463 items originating from countries that do not have a bilateral trade pact with Mexico including PTA or free trade agreement (FTA).

The signing of the terms of reference would be the first step for safeguarding Indian exporters from the increased duties, experts said, especially in the automotive industry.

Government trade data shows that in 2025-26, Indian merchandise exports to Mexico totalled $5.73 billion, with $1.92 billion of it coming from automobiles.

Automobiles, textiles and clothing, plastics, steel, household appliances, aluminium, toys, furniture, footwear, leather goods, paper and cardboard and motorcycles and trailers and glass products are among the products impacted by Mexico's tariffs.

S. tariff measures came into effect on January 1, under a decree that is part of Mexico's Plan, which seeks to boost domestic content in production chains by 15% by 2030. It aims to improve Mexico's revenue performance by making it one of the world's 10 biggest economies by 2030, revitalizing local industries and generating 1.5 million jobs, by the end of the decade.

PTA (as a faster path for export protection) has been identified as a better option

Experts said that a bilateral PTA could be a better way to tackle the tariff challenge in a faster time than a comprehensive FTA, which would take relatively more time to be finalized.

According to one official, the agreement to be agreed should be limited to preferential trade of goods.

A PTA tends to be narrow in its scope and is a positive list of products that have reduced tariffs, but they are not usually completely removed. An FTA, in the meantime, aims to remove tariffs on far more items, with a negative list of exceptions.

In FY26, India-Mexico trade amounted to $7.83 billion

As per government statistics, bilateral trade of goods between India and Mexico was of the order of $7.83 billion during 2025-26.

During the financial year, India exported goods valued at around $5.73 billion to Mexico and imports from the Latin American nation amounted to $2.1 billion.

Also Read: Clasico Victory Signals Success for Mourinho’s Real Madrid Project

Automobiles and auto parts, pharmaceuticals, engineering goods and chemical products are India's top exports to Mexico.

Mexico exports most of its goods to India are the crude oil which comprises almost three-fourths of its total exports to India. Other products that are supplied from Mexico include gold and gold-based jewellery, and chemical compounds.

The suggested PTA will be likely to serve as a roadmap for preferential market access to certain products, starting negotiations after formal signing of the terms of reference.

Also Read: Kriti Sanon and Varun Dhawan Reunite With Bhediya Director Amar Kaushik, Fuel Sequel Speculation Among Fans