India is exploring a limited Preferential Trade Agreement (PTA) with Mexico as a “fast-track” solution to address steep new import tariffs. Commerce Secretary Rajesh Agrawal explained that a full-fledged Free Trade Agreement (FTA) would take too long to complete, making a PTA the only viable way forward. Technical teams from both countries are currently discussing the framework for this deal.
Mexico is set to impose import tariffs ranging from 5% to 50% on approximately 1,455 tariff lines starting January 2026. These tariffs target non-FTA partners, including India, China, South Korea, Thailand, and Indonesia. Official estimates suggest these revisions could hit over $2 billion worth of annual Indian exports, particularly in sectors like automobiles, textiles, and electronics.
Agrawal observed that India is not the primary target of Mexico’s move; rather, the tariffs appear aimed at curbing Chinese imports. By pursuing a PTA, India hopes to secure necessary concessions for its supply chains while offering Mexico similar advantages in areas of their export interest.