India-Mexico trade pact nearing completion
What's the story
The Terms of Reference (ToR) for a potential trade pact between India and Mexico are "almost finalized," government sources have said. The signing is expected to take place in November. This comes as both countries look to maintain smooth business relations amid Mexico's recent approval of significant tariff hikes, effective January 1, 2026.
Pact purpose
Proposed trade agreement to stabilize bilateral relations
The proposed trade agreement, which has been in the works since last year, is aimed at stabilizing bilateral relations and preventing sudden price fluctuations.
In 2024, India-Mexico trade stood at $8.74 billion (as per DGCI&S), with exports worth $5.73 billion and imports worth $3.01 billion.
The trade surplus was recorded at $2.72 billion during this period.
Tariff impact
Mexico's tariff hike could impact Indian exports
Mexico's recent tariff hike, which raised duties from 5% to 50% on 1,455 tariff lines, could affect $2 billion worth of Indian exports.
These include automobiles, textiles, and steel products.
Despite Mexico maintaining that these changes aren't aimed at India specifically, both countries are keen on resolving the issue to ensure uninterrupted trade flow.
Trade dynamics
India's exports to and imports from Mexico
India's key exports to Mexico include light vehicles, motorcycles, base metals, auto parts, mechanical machinery, textiles/clothing, chemicals, and pharmaceuticals.
On the other hand, India's major imports from Mexico are crude petroleum oils, smartphones, and gold.
In December 2025, India's Commerce Ministry had announced plans for a WTO-compatible Preferential Trade Agreement (PTA) with Mexico to avoid high tariffs on Indian exporters.