India-EU Free Trade Agreement to Revolutionize Healthcare Access
The landmark free trade agreement between India and the European Union, finalized this week, promises to transform healthcare accessibility for millions of Indian patients through substantial tariff reductions on pharmaceutical products and medical equipment.
Substantial Tariff Elimination on Pharmaceutical Imports
Under the new agreement, tariffs on pharmaceutical exports from Europe to India will drop dramatically from 11% to zero for nearly all products. This significant reduction is expected to improve access to innovative medicines for Indian patients while lowering input costs for specialized raw materials that Indian pharmaceutical companies import from Europe.
Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, emphasized that "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."
Europe's pharmaceutical exports to India reached €1.1 billion in 2024, according to official data from the European Commission. The tariff elimination is poised to expand this trade relationship significantly.
Projected Price Reductions for Critical Medications
Industry experts project substantial price reductions for European drugs in the Indian market over the coming years. Saurav Ojha, co-founder and director of Gurugram-based Iberia Pharmaceuticals, explained the expected timeline:
- Short-term price reductions of 10-20% are anticipated initially
- Over the next 2-3 years, prices could drop by 40-70% as local manufacturing scales up
- Biosimilars entering the market and patent expiries will further drive down costs
This shift is particularly significant for weight-loss drugs in the GLP-1 class, including semaglutide and tirzepatide, as well as other critical therapies that India imports from Europe:
- Oncology treatments
- Biologics and monoclonal antibodies
- Insulin analogues and GLP-1 agonists
- mRNA and viral vector vaccines
Benefits for Indian Pharmaceutical Companies
Europe represents India's second-largest pharmaceutical export market, with sales reaching $5.8 billion in FY25. Despite this substantial trade volume, India accounts for only 2.2% of the EU's total pharmaceutical imports, indicating significant growth potential.
While Indian pharmaceutical products already enjoy zero-duty access to EU markets, the new agreement is expected to particularly benefit small and medium enterprises. Namit Joshi, chairman of the Pharmaceuticals Export Promotion Council of India, noted that "reduced tariffs and smoother market entry will directly enhance their ability to scale exports, invest in compliance and integrate into European supply chains."
However, challenges remain for Indian exporters. According to an Emkay Global Services report, Indian companies continue to face significant non-tariff barriers in the EU, including:
- Approval timelines extending to 2-3 years, delaying commercialization
- Registration fees reaching as high as €300,000, creating substantial barriers
Medical Equipment Tariff Reductions
The trade agreement also includes dramatic tariff cuts on European medical equipment exports to India, with rates dropping from 27.5% to zero for 90% of products. This encompasses optical, medical, and surgical equipment that Indian healthcare facilities rely upon.
Domestic medical equipment manufacturers have expressed cautious optimism about these changes. Rajiv Nath, forum coordinator of industry body AiMed, emphasized that "the India-EU FTA must ensure a level playing field for India's medical device manufacturers" through fair regulatory alignment and safeguards against predatory imports.
Intellectual Property Considerations
The agreement reinforces intellectual property protections under the TRIPS agreement while affirming the Doha Declaration, which allows governments to override patents when necessary. This balanced approach addresses concerns about potential delays in generic drug entry while maintaining appropriate protections for innovation.
The pharmaceutical and healthcare sectors await further details on how the trade deal will impact regulatory processes, with streamlining expected to provide the most significant benefits for Indian exporters seeking to expand their European market presence.
