India-Mexico trade pact reflects growing South-South cooperation: Report

November 6, 2026

New Delhi: The proposed India-Mexico Preferential Trade Agreement (PTA) reflects a broader shift towards deeper economic cooperation among Global South economies as they seek to diversify supply chains, reduce dependence on traditional markets amid recurring geopolitical volatilities, a new report has said.

The report from Times of Oman said the pact marks Global South economies involved in high-tech trade ensuring a mutually beneficial trade ecosystem, independent of Western intervention.

Trade Pact Aims to Strengthen Supply Chain Resilience

Supply-chain disruptions and the gradual erosion of a unipolar economic order created opportunities for emerging economies to strengthen bilateral partnerships based on mutual economic interests, evident in the India-Mexico trade pact.

“Indian pharmaceuticals, engineering goods and auto components are expected to meet real demand in a Mexican market actively seeking alternatives to concentrated supply,” the report said.

Global South nations are also coming together for economic self-defence against new tariffs, the publication noted.

India gets a stable entry point into the vast South American markets due to the locational advantage of Mexico. India can also widen access to North American-linked supply chains and industrial markets through deepening ties with Mexico.

Focus on High-Value Goods and Advanced Sectors

The emerging South-South Model envisages Global South partners trading high-value goods with each other and, through increasing trade, build robust supply chains to safeguard themselves against Western dominance.

“This is highlighted in the agreement, which focuses on advanced sectors like automotive engineering, advanced electronics, and pharmaceuticals,” the report said.

India, Mexico Begin Formal PTA Negotiation Process

India and Mexico signed the Terms of Reference for a PTA in October 2026, paving the way for formal negotiations covering market access, rules of origin, customs procedures and trade facilitation.

Mexico’s decision to impose import tariffs ranging from 5 per cent to 50 per cent on over 1,400 product categories from countries without trade agreements had increased the urgency for a bilateral arrangement.

During April-September 2026, India exported about $1.41 billion of high-value technology goods to Mexico, including motor vehicles, auto components, two- and three-wheelers, aluminium, iron and steel products.