New Delhi: India and Mexico are preparing to begin talks on a trade agreement this week. The main aim is to help Indian businesses sell their products in Mexico without facing very high import taxes.
The two countries have already agreed on the basic rules for starting these talks. Commerce Secretary Rajesh Agrawal is visiting Mexico as part of India’s efforts to strengthen trade ties.
The proposed agreement is called a Preferential Trade Agreement (PTA). It could help Indian exporters in sectors such as cars, clothes, shoes, steel, chemicals, plastic goods and toys.
Why Is India Seeking This Trade Deal?
Mexico has announced import taxes of up to 50% on 1,463 products from countries that do not have a suitable trade agreement with it.
Import tax, also called a tariff, is a tax charged on goods brought into a country from another country. When this tax rises, products can become more expensive for buyers.
The proposed deal could help Indian businesses face lower taxes on selected products. This may make Indian goods more competitive in the Mexican market.
Cars are especially important in this trade relationship. In the financial year 2025–26, India exported goods worth around $5.73 billion to Mexico. Cars and other automobiles accounted for about $1.92 billion of these exports.
Which Indian Products Could Benefit?
The proposed agreement may cover several types of Indian goods, including:
- Cars and automobile parts
- Clothes, textiles and footwear
- Steel, aluminium and plastic products
- Toys, furniture and household appliances
- Leather goods, paper and glass products
- Chemicals and other manufactured goods
The final list will depend on the terms agreed upon by both countries.
What Is a Preferential Trade Agreement?
A PTA is an agreement under which two countries give each other better tax rates on selected products.
For example, if Mexico charges a high tax on Indian shoes, a PTA could reduce that tax if both countries agree to include shoes in the deal. This could help Indian companies sell their products at more competitive prices.
A Free Trade Agreement (FTA) usually covers a wider range of goods and services and aims to remove many trade barriers. Such agreements can take longer to negotiate.
India and Mexico are considering a PTA as a possible quicker way to address the immediate problem of high import taxes.
How Much Do India and Mexico Trade?
Government figures show that trade in goods between India and Mexico reached around $7.83 billion in 2025–26.
Here is a simple breakdown:
- India’s exports to Mexico: Around $5.73 billion
- India’s imports from Mexico: Around $2.1 billion
- Total trade: Around $7.83 billion
India sells products such as cars, medicines, engineering goods and chemicals to Mexico.
Mexico, meanwhile, supplies crude oil to India. Oil accounts for a large share of Mexico’s exports to the country. Mexico also exports gold, jewellery and chemical products to India.
What Happens Next?
The signing of the terms of reference will formally start the negotiations. Officials from both countries will then discuss which products should receive lower import taxes and what conditions the agreement should include.
The deal is not final yet. Its benefits will depend on the products covered, the tax reductions agreed upon and the time taken to complete the negotiations.
If the agreement moves forward, it could help Indian exporters protect their businesses in Mexico and strengthen trade between the two countries.
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