New Delhi, Oct. 27 -- India and Mexico will sign terms of reference this week to formally launch negotiations for a free trade deal, aiming to shield exports of Indian automobiles, textiles, footwear, plastic, steel, chemicals and toys from recently-imposed high tariffs in Mexico, officials familiar with the details said. Both India and Mexico have already finalised terms of reference (ToR) for a preferential trade agreement (PTA). The two sides will formally sign the ToR in the next couple of days as commerce secretary Rajesh Agrawal is visiting Mexico from Monday, they said, asking not to be named. Agrawal is on a week-long trade mission covering Mexico and Brussels, headquarters of the European Union. The proposed India-Mexico PTA is expected to shield Indian exporters from high tariffs up to 50% imposed by Mexico on 1,463 items on imports from countries with which it does not have any bilateral deal such as a PTA or a free trade agreement (FTA). Experts said the ToR is the first step towards shielding Indian exporters from high tariffs in Mexico, particularly Indian automobile exports. According to government data, out of total $5.73 billion Indian merchandise exports to Mexico in 2025-26, automobiles were the largest at $1.92 billion. Identified items include goods like automobiles, textile, clothing, plastic, steel, household appliance, aluminum, toys, furniture, footwear, leather goods, paper and cardboard, motorcycle, trailer and glass products. Effective from January 1, the decree pertained to the Mexico Plan to increase the national content in production chains by 15% by 2030. Launched in January 2025, the plan aims to make Mexico the top 10 economy by 2030, revive local industries, and create 1.5 million jobs. Experts said it is prudent to negotiate a bilateral PTA quickly to protect Indian exports, instead of going for a comprehensive FTA, which will take more time. An official said the proposed PTA is expected to focus only on preferential trade in goods. A PTA is limited in scope that provides a positive list of items where tariffs are usually reduced and rarely brought to zero. An FTA is a comprehensive agreement aiming to eliminate tariffs on a vast range of items while keeping a negative list of items. According to government data, bilateral merchandise trade between India and Mexico was about $7.83 billion in 2025-26....