India - Mexico Trade and Economic Relations India - Mexico Trade and Economic Relations

India - Mexico Trade and Economic Relations

India-Mexico Trade and Commercial Relations

  1. I Economic overview:

            The Mexican economy registered a contraction of 0.14% in 2019. This represents a contrast to the trend of the last years during which the annual growth rates expanded at a moderate rate.  The annual GDP of 2019 shows that it compares negatively to the data of 2018 that showed a 2.1% GDP annual growth and to the average of 2.17% showed in the period from 2011 to 2018.  In 2019, Mexico's economic performance showed weak investment andslowdown in consumption. Mexico received 33.7 billion USD of foreign direct investment in 2019. The NAFTA renegotiation process was finalized and in early 2020, the new agreement was signed as USMCA, putting behind the uncertainty the renegotiation process brought to the attractiveness of the Mexican economy. USMCA entered into force on 1 July 2020.

  1. According to the IMF, Mexico's economy was ranked 15th in the world in 2019 in nominal GDP (only Brazil has a larger GDP among Latin American countries) and 11thlargest by purchasing power parity. It is currently one of only two Latin American members of the OECD (the other is Chile). Mexico is also one of the WTO members with the greatest number of Free Trade Agreements with a network of 12 FTAs with 46 countries.
  1. The interconnectedness of the Mexican and US economies is an important feature of its economy. Economic integration is derived from close linkages across four important economic channels: trade, remittances, investment, and financial channels. The trade channel is especially well developed, with around 76% of all Mexican exports destined for sale in the US domestic market. Similarly, Mexico has become the United States' third-largest export market and second-largest source of imports after China.
  1. Mexico can attribute its transformation from a highly protected economy to its more open, regionalised and market-based economy of today to widespread trade liberalisation over the past several decades. This has encouraged multi-national companies to set up plants to take advantage of relatively low labour costs and proximity to the US market. Though Mexican economic activity is increasingly dominated by the private sector, it may also be characterized as a mixture of modern, export-oriented industry and agriculture-based economy.
  1. Much of Mexico's modern economy has been driven by competition and export opportunities stemming from Mexico's extensive network of Free Trade Agreements (FTAs), covering more than 90 per cent of the country's trade. They include FTAs with Chile, the United States and Canada (USMCA), the European Union; Israel; Colombia; Bolivia; Guatemala, El Salvador, and Honduras; Uruguay; the European Free Trade Area (Norway, Iceland, Switzerland, and Liechtenstein), Peru, Japan, and Panama. Recently it signed the CPTPP and negotiating FTAs with Brazil and South Korea. Mexico is also a founding member of the Pacific Alliance, a trade liberalising pact between Chile, Colombia, Mexico, and Peru.  India became an observer to the Alliance in 2012.
  1. II India-Mexico Trade & Investment Relations:
  1. Mexico’s links with India go back many centuries, to the time of the galleon trade between the Philippines and Nueva España (New Spain), when trade and commerce between Mexico and all the major countries of Asia, including India, flourished. This was the age in which Santa Catarina, the Catholic figure of Puebla, is reported to have come from Mughal India, bringing with her the so-called La China Poblana, which soon acquired the status of traditional women’s dress in Mexico. This was the age in which the rich cotton scarves of Pulicut and Calicut in southern India were exported to the markets of Mexico and became known here, over time, as the “Paliacate”.
  1. We have a problem-free relationship based on goodwill for each other and tremendous prospects to enhance economic cooperation between India, the world’s 5thlargest economy, and Mexico, the world’s 15th largest economy. In the 1960s, India’s efforts to achieve food security were greatly assisted by the high-yielding hybrid wheat seed, Sonora created by Norman Borlaug and his team in CIMMYT, Mexico.
  1. India and Mexico agreed to work together to elevate their ties from a ‘Privileged Partnership’ to ´ Strategic Partnership´ during the Prime Minister’s visit to Mexico on 8thJune 2016. There are regular meetings of bilateral interactive mechanisms, which include a Joint Commission and a High-Level Group on Trade, Investment and Economic Cooperation as well as consultations between the two foreign ministries. There also exist between us several bilateral agreements, including for investment promotion and protection, double taxation avoidance, extradition, administrative assistance in customs matters, air services, and for cooperation in many other sectors.
  1. In order to reinvigorate the trade and investment relationship between India and Mexico, a High-Level Group between India and Mexico created in May 2007 under a Memorandum of Understanding to promote trade, investment and economic cooperation between the two countries and it held its first meeting in September 2007 during the visit of Mexican President Calderon to India. The first HLG created six working groups on: Trade Promotion, Investment Promotion (including infrastructure), Services, Customs Cooperation, Industrial dialogue with private sector participation (chemical-pharma, IT, textiles, and bio-fuels) and tourism. The 7thJoint Commission Meeting between India and Mexico which was held in Mexico on 23 June 2017 explored the areas of cooperation further and discussed some of the bilateral trade and market access issues.
  1. An outstanding feature of our current engagement is the sharp spurt in our bilateral trade and investment in recent years. India-Mexico bilateral trade has grown to 9.3 billion USD in 2019, however, it meant a decrease of 8.5% compared to 2019. The bilateral trade reached 10.2 billion USD in 2018, surpassing the 10 billion mark for the first time. The trade balance is in favour of India (1.04 bn) at the moment. At the same time, about 77 % of Mexico exports comprise just one item, crude oil. India imports about 3.2 billion USD worth of oil from Mexico and is already Mexico’s third-largest market globally. Since India is the world’s fourth-largest consumer of oil and one of the world’s fastest-growing economies, there is scope to buy much more oil from Mexico in the future to meet our energy requirements.
  1. Indian companies see Mexico as a major investment destination with access to USMCA and Latin America. Several Indian companies have already invested in Mexico in recent years. The three strongest performing areas for Indian investments in Mexico are information technology, pharmaceuticals, and automotive sectors. Almost all major Indian IT and ICT companies (TCS, Infosys, Tech Mahindra, Aptech, Hexaware, Wipro, Patni Computer Systems, Birlasoft etc.) have operations in Mexico. Several Indian pharmaceuticals firms (Lupin, Dr. Reddy’s Laboratories, Zydus, Claris Life Sciences, Hetero Drugs, Sun Pharma, and Solara) have investments and operations in Mexico. In the food processing sector, Parle has recently started manufacturing in the State of Mexico. This is their first plant in the western hemisphere. OYO Hotels made its entry in 2019 and has made big strides since then.
  1. Indian companies have also invested in manufacturing auto parts, tyres, packaging, and electricals. TORNEL, which makes tyres for cars and trucks in Mexico, is owned by JK Tyre, an Indian company.  Bajaj Auto has a tie-up in Mexico for assembling and marketing two-wheelers (motorcycles) and three-wheelers. The Samvardhana Motherson Group (SMP) of India has investments in Puebla, San Luis Potosí and other northern states, manufacturing auto components for Original Equipment Manufacturers like Audi and VW. The group has over 15 plants in total in Mexico and employs more than 23,000 Mexicans. There are sizeable Indian investments in the north of the country, such as Flex Americas in Tamaulipas, Varroc Lighting (making modular LED lighting units for the auto clusters) KEC etc. in Monterrey.
  1. Leading Mexican companies like Cinépolis, Tremec, Nemak, Softec, Metalsa, Ruhrpumpen, KidZania and Bimbo and some others have likewise invested in India in recent times. NEMAK, which is part of the ALFA Group of Mexico has invested 11 million USD in a manufacturing facility in Chennai. SOFTTEK, an IT company from Monterrey recently become the first Latin American company to invest in the service sector in India, when it invested 26 million USD in acquiring an Indian company in Bangalore. Great Foods & Beverages of Mexico has invested about 10 million USD in India and has a great future for its fruit chill bars and noodles.
  1. Overall, Indian investments in Mexico are far greater than the other way around. India’s investments in Mexico are more than 3 billion USD. On the other hand, Mexico has only an investment of about 1 billion USD (both direct and indirect).   

III. Bilateral Trade Performance in 2019

  1. The year 2018 was unprecedented as for the first time, India became part of the top ten trade partners of Mexico. Mexico also emerged as the most important trade partner of India in the entire Americas after the US. This trend also continued in 2019, however, with a decrease in the total bilateral trade compared to 2018. The trade decreased by 8.5% over 2019 and reached a level of 9.3 billion USD with Indian exports worth 5.18 billion and imports 4.15 billion. India’s export to Mexico decreased by 0.97% in 2019.  The trade balance remained in favour of India for the sixth consecutive year.

Bilateral Trade Mexico-India in the last six years (Figures in thousands USD)








Exports from India







Imports from Mexico







Total trade







  1. India’s total export to Mexico during 2019 reached 5.18 billion USD. In 2018 they were recorded at 5.23 billion USD as compared to 5.02 billion USD in 2017, and India’s imports from Mexico were 4.15 billion USD in 2019, 4.96 billion USD in 2018 as compared to 3.45 billion USD in 2017.  Importantly, our export to Mexico grew by almost 20.89% from 2016 to 2019 whereas Mexico’s export to India increased by 94.8% in the same period. India recorded an impressive growth under the automobile and auto component sector (HS Code: 87), particularly in the four-wheelers category. In the year 2019, India’s export under this category was 1.65 billion USD which had a slight decrease compared toits value in 2018 of 1.72 billion USD (3.4% decrease). Under HS Code 8703, India is Mexico’s third-largest supplier after the US and Japan (1.2 billion USD). 
  1. The export figures under “Motor Cars and Vehicles” (HS Code 8703) has seen this upward trend because in the last couple of years Volkswagen, Ford, Chevrolet and Nissan have started exporting their four-wheelers which are 100% made in India. Volkswagen India alone exported its 100,000thunit to Mexico in 2015 (a “Vento” model). General Motor’s Beat which is sold as Spark in the Mexican market, Hyundai’s i10 Grand and Xcent, Ford’s Figo and Figo Aspire, and Maruti Suzuki’s Ciaz are being exported to Mexico from their India based operations.  There are strong demands of India-made cars in Mexico and in years to come exports of these are bound to increase. 
  1. In the year 2019 also exports of crude oil from Mexico to India remained the single largest item of imports. It registered a decrease from 3.94 billion USD in 2018 to 3.21 billion USD (18.56% decrease in value). Mexican export of crude oil which was 77% of its total exports to India in 2019, while it represented 79% in 2018. India is still thethird-largest buyer of Mexico’s crude oil after the US and Spain. Among Asian countries, India is the largest buyer of Mexico’s crude oil followed by South Korea and Japan.  China is its 6thlargest buyer.
  1. The balance of trade of over 1 billion USD in 2019 is in India’s favour, consecutively for 6 years. The trade gap has reduced considerably because of the increase in Mexican exports to India, especially the value of crude oil exported. Despite the fact that India bought an increased volume of its crude oil, the value of its import dropped significantly due to the volatility of global oil prices.
  1. IV Commercial delegations
  2. One of the major drivers of trade between the two countries has been the steady flow of trade missions from India to Mexico. In recent years, Mexico has seen more than 200 Indian companies visit and explore the market almost every year. There has been a regular participation of Indian delegations in some of the most reputable exhibitions in Mexico such as InterModa, Expo Ferretera, Expo Plastimagen and Expo CIHAC. The Embassy supports the trade mission in all possible ways. In addition, CII, FICCI and TPCI have a cooperation agreement with the largest chamber of commerce in Mexico - COMCE. The recently revitalized Indian-Mexican Business Chamber (IMBC) is becoming an additional force for trade missions visiting Mexico from India.
  3. From Mexico, the commercial wing has nominated and sent many businessmen to various events and exhibitions in India. In addition, there have also been high level delegations in various sectors. In 2017, several delegations visited India, including the head of COFEPRIS (Mexico's drug regulatory authority), the CEO of ProMexico (Mexico's national investment promotion agency) and the governor of the state of Nuevo Leon. Most recently, in February 2019, the Mexican Minitser of Energy visited India and participated in Petrotech 2019.
  4. Mexico being one of the major economies of the Latin America is one of the focus countries for Indians. The real potential of India-Mexico bilateral commercial and economic relationship is yet to be realised.

Last updated – 13 August, 2020