India and Mexico have finalised the Terms of Reference (ToR) for a proposed preferential trade agreement (PTA), with the formal signing of the roadmap likely to take place soon, according to a government official. As reported by Business Standard, the official stated that "The terms have been finalised. We are just trying to align our timelines to sign the ToR." The signing will take place in either of the capitals once timelines align. New Delhi initiated discussions for a trade agreement with Mexico after the latter imposed tariffs as steep as 50 per cent on over 1,400 products from all non-preferential partners, including India, demonstrating the strategic importance of this agreement.
Unlike a comprehensive free trade agreement, the proposed PTA with Mexico is expected to cover a more limited set of areas, including trade in goods and market access, rules of origin, customs procedures and trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade and dispute settlement, according to Business Standard. The ToR for a trade deal is a formal roadmap that sets the boundaries, goals, scope and rules for economies before they start official negotiations.
Despite Mexico's imposition of tariffs as steep as 50 per cent on over 1,400 products from all non-preferential partners, including India, India's exports to Mexico have grown nearly 17 per cent so far in the calendar year till June, according to the latest data available with the Department of Commerce, as reported by Business Standard. India exported goods worth $5.73 billion to Mexico in 2025-26 (FY26), with nearly half of the shipments comprising vehicles and auto components, and electrical machinery and equipment. India also recorded a trade surplus of $3.63 billion with Mexico during the year, highlighting the strength of bilateral trade relations despite the tariff challenges.
The trade deal with Mexico is part of India's broader strategy to diversify export markets and expand its footprint in Latin America, according to Business Standard. The commerce department is engaged in negotiations for a trade deal with several other South American economies, including Chile, Peru, and the Brazil-led five-member bloc Mercosur. Additionally, India and Canada are scheduled to hold their next round of FTA negotiations in New Delhi in September and are confident of concluding the talks by November. The government is also pushing ahead with trade negotiations with developed economies, demonstrating India's comprehensive approach to expanding its global trade partnerships.
India also finalised an FTA with the European Union (EU) in January this year, with both sides remaining on track to sign the agreement by December, the second official said, as reported by Business Standard. The two trade partners have finished legal scrubbing of the text of the trade deal and now Brussels is working on translating the text into various European languages. Both sides aim to implement the agreement in the first half of 2027. This progress across multiple trade negotiations demonstrates India's active role in expanding its global trade relationships and diversifying its export markets.
