India and Mexico will sign terms of reference this week to formally launch negotiations for a free trade deal, aiming to shield exports of Indian automobiles, textiles, footwear, plastic, steel, chemicals and toys from recently-imposed high tariffs in the Mexican market, officials familiar with the details said.
The proposed India-Mexico PTA is expected to shield Indian exporters from high tariffs up to 50% imposed by the Mexican government on 1,463 items on imports from countries with which it does not have any bilateral deal such as a PTA or a free trade agreement (FTA).
Out of total $5.73 billion Indian merchandise exports to Mexico in 2025-26, automobiles constituted the single largest segment at $1.92 billion, according to the government trade data.
Experts said the ToR is the first step towards shielding Indian exporters from high tariffs in Mexico, particularly Indian automobile exports to the country.
India-Mexico Trade
Key Indian merchandise exported to Mexico, included automobiles and auto parts, pharmaceuticals, engineering goods and chemical products. On the other hand, Mexico mainly supplied crude oil, which accounted for almost three-fourths of its total exports to India. Other products of export to India are gold and related jewellery, and chemical compounds.
Experts said it is prudent to negotiate a bilateral PTA quickly to protect Indian exports from higher tariffs instead of going for a comprehensive FTA, which will take relatively more time. An official said the proposed PTA is expected to focus only on preferential trade in goods.
