Commerce Secretary Rajesh Agrawal
India is considering a limited preferential trade agreement (PTA) with Mexico to address the country’s new import tariffs, instead of negotiating a full-fledged free trade agreement (FTA), as the latter could take a long time for completion, said Commerce Secretary Rajesh Agrawal.
“The only fast way forward is to try and get into a PTA because a FTA will take a lot of time. So, we are trying to see what can be a good way forward. The technical teams are discussing,” said Agrawal at a briefing on Monday.
Indian exports
Mexico’s new import tariffs, to be imposed on about 1,455 tariff lines from January 2026, are set to hit over $2 billion worth of annual exports from India, per government estimates. The sectors that could be severely affected include automobiles, two-wheelers, auto components, and many others.
The Commerce Secretary said there may not be a recourse at the WTO as the tariffs have been increased on MFN (most favoured nation) basis, and are applied on all trade partners, except countries with which Mexico has free trade pacts.
However, it appeared that it was not India but China that was a target of the tariffs, so a PTA between India and Mexico could sort out the problem.
“There primary target is not the Indian supplier. If our supply chains are not a target, then we can create a PTA and try to get concessions that are required for Indian supply chains, and also similarly offer them concessions where they have export interest without hurting our sensitivities,” said Agrawal.
On the India-US trade negotiations, Agrawal said the two countries were very close to finalising the framework for the proposal pact, but he did not want to put a timeline to it. He said the visit of the new US Deputy Trade Representative Rick Switzer last week was mostly a familiarisation trip, where both sides took stock of bilateral trade relations and reviewed the progress of the trade negotiations.
This week, India and Canada, too, are set to hold virtual discussions to the proposed Comprehensive Economic Partnership Agreement (CEPA). The FTA talks had been discontinued in September 2023 due to political tensions over the killing of a Sikh separatist leader in Canada, but the matter has been largely resolved and trade talks are now set to begin again.
“In two years, countries have moved on, the world has moved on. Lot of other challenges in trade are coming up. We need to take stock as to where we stopped….,” said Agrawal. India was negotiating multiple FTAs with partners such as Chile, the EU, the Russia-led EAEU, and things were on track, he added.
Published on December 15, 2025