India’s landmark free trade deal with the European Union, finalised on Tuesday, includes significant tariff cuts on exports of pharmaceutical products as well as optical, medical and surgical equipment from Europe to India.
Tariffs on pharmaceutical exports from Europe to India will drop to zero from 11% for almost all products. This will improve access for Indian patients to novel drugs from Europe and reduce input costs for specialized raw material imported from Europe, industry executives said.
Europe’s pharma exports to India amounted to €1.1 billion in 2024, according to a fact sheet released by the European Commission.
“The expected removal of EU tariffs of up to 11% on pharmaceuticals will enhance trade and support greater access to innovative medicines for Indian patients,” Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, said in a statement.
“In the short term, we anticipate a mild price reduction of 10-20%, but the real impact will unfold over the next 2-3 years, with prices potentially dropping by 40-70% once local manufacturing scales up, biosimilars enter the market and patent expiries align,” said Saurav Ojha, co-founder and director of Gurugram-based Iberia Pharmaceuticals. “This shift is particularly critical in the context of weight-loss drugs in the GLP-1 class such as semaglutide and tirzepatide.
India imports drugs in the key therapy areas of oncology, biologics and monoclonal antibodies, insulin analogues and GLP-1 agonists as well as mRNA and viral vector vaccines from Europe.
“While OPPI is awaiting the release of the full Agreement, it has gone through Memo on EU-India Free Trade Agreement Chapter by Chapter Summary released by the European Commission and is encouraged that the summary states that the FTA provides a high level of protection and enforcement of IP (intellectual property) rights, in line with Indian and EU IP laws and also covers protection of trade secrets and undisclosed information,” Anil Matai, director general of the Organisation of Pharmaceutical Producers of India (OPPI), which represents research-based global pharmaceutical companies in India, said in a statement.
Benefits for Indian firms
Europe is India’s second-largest pharma export market, with sales of $5.8 billion in FY25. India accounts for 2.2 percent of the EU’s total pharma imports, highlighting the considerable headroom for growth, according to an Emkay Global Services report dated 24 January.
While Indian pharmaceutical products already face zero duty entry into the EU, the deal is expected to widen access, especially for small and medium enterprises.
“Reduced tariffs and smoother market entry will directly enhance their (MSMEs) ability to scale exports, invest in compliance and integrate into European supply chains,” said Namit Joshi, chairman of the Pharmaceuticals Export Promotion Council of India (Pharmexcil).
“Indian companies continue to face significant non-tariff barriers in the EU, with approval timelines often extending to 2-3 years, delaying commercialization; registration fees can reach as high as €300,000, creating a material barrier,” Emkay said in its report.
Details on how the trade deal will impact regulatory processes are awaited but streamlining them is expected to have the most benefits for Indian exporters.
While there was an EU push for stricter intellectual property measures like data exclusivity, which can delay the entry of generic drugs, the deal reinforces intellectual property protections provided under the TRIPS agreement and affirms the Doha Declaration under which governments can override patents if needed.
Medtech tariffs slashed
Tariffs on European medical equipment exports to India have also been slashed to zero from 27.5% for 90% of the products. Domestic medical equipment makers, who have sought further interventions to strengthen local manufacturing, which is very import-heavy, are cautious.
“The India-EU FTA must ensure a level playing field for India’s medical device manufacturers," Rajiv Nath, forum coordinator of industry body AiMed, told
Mint, adding that the agreement needs to have “fair regulatory alignment” and “safeguards against predatory imports,” especially from third-world countries. The industry body is awaiting the fine print on the deal, he said.