India and Mexico have formally opened negotiations for a Preferential Trade Agreement after signing terms that define the scope and process of the talks. The framework covers market access for goods, rules of origin, customs procedures, trade facilitation, dispute settlement, product standards and trade-remedy measures.
The initiative follows discussions between Prime Minister Narendra Modi and Mexican President Claudia Sheinbaum at the G7 Summit in Canada in June 2025. Indian Commerce Secretary Rajesh Agrawal and Mexican officials used the latest engagement to identify areas where trade and investment could expand while supply chains become more diversified.
Potential sectors include automobiles, chemicals, electronics, pharmaceuticals, agri-food, energy, critical minerals, medical devices and advanced manufacturing. Mexico's position in North American and global value chains makes the negotiation strategically relevant for Indian exporters, while Indian demand and production networks present opportunities for Mexican firms.
Signing terms of reference does not itself reduce a tariff or create market access. The eventual value of the process will depend on the concessions negotiated, the rules used to determine product origin, regulatory cooperation and whether businesses on both sides can use the agreement without facing prohibitive compliance costs.
