India-EU Free Trade Deal: What's In Store For The Healthcare, Pharma Sectors? Explained

India and the European Union have concluded negotiations on a long-pending free trade agreement – a move expected to significantly reshape trade flows across sectors, including automobiles, machinery,

pharmaceuticals, and medical devices.

Endorsed as the “mother of all deals”, the free trade agreement (FTA) comes as India seeks to deepen its manufacturing footprint while integrating more closely with global value chains.

According to the press release issued by the European Commission, India has agreed to tariff concessions that go beyond what it has offered any other trading partner so far – a shift that could materially alter market access for European exporters and Indian manufacturers alike.

“India will grant the EU tariff reductions that none of its other trading partners have received. For example, tariffs on cars are gradually going down from 110% to as low as 10%, while they will be fully abolished for car parts after five to ten years. Tariffs ranging up to 44% on machinery, 22% on chemicals and 11% on pharmaceuticals will also be mostly eliminated.”

For healthcare industries, however, stakeholders said the headline tariff cuts are only part of the story. Regulatory alignment, safeguards against unfair competition, and how patient safety is protected will ultimately determine if the FTA delivers balanced gains.

OPPORTUNITY, BUT WITH GUARDRAILS: EXPERTS

In the pharmaceutical sector, industry leaders see the FTA as a reinforcement of an already strong India-EU relationship.

Indian companies are major suppliers of quality-assured generic medicines to Europe, and lower tariffs are expected to strengthen this role. The agreement also reassures the industry on intellectual property, an area that has historically been sensitive in trade negotiations.

As Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance – the lobby representing domestic drug makers – pointed out, Indian manufacturers are already deeply embedded in Europe’s medicine supply chains.

He noted that the “expected removal of EU tariffs of up to 11% on pharmaceuticals will enhance trade” while also supporting “greater access to innovative medicines for Indian patients”. He added that the deal “reinforces the intellectual property framework under the TRIPS Agreement and the Doha Declaration”, giving companies regulatory certainty as trade expands.

For the medical devices industry, the focus is sharper on ensuring fair competition and avoiding unintended consequences. Domestic manufacturers are wary that tariff reductions, if not carefully sequenced, could expose them to predatory imports routed through third countries.

Rajiv Nath, forum coordinator of the AiMeD – umbrella association of Indian manufacturers of medical devices – stressed that the agreement must not tilt the playing field. He said the FTA should ensure “fair regulatory alignment and safeguards against predatory imports (especially from 3rd countries)” so that it can “unlock high-value collaboration, boost domestic manufacturing, and support India’s ambition to become a top-five global MedTech hub”.

Nath underscored that patient safety and quality standards should anchor the agreement, calling for a mutual recognition agreement “based on common ISO standards”, while flagging that industry is keen to study the fine print and subsequent cooperation mechanisms.

European device makers operating in India, meanwhile, are also looking at the agreement as a chance to deepen their footprint – provided regulatory clarity improves. According to Pavan Choudary, chairman of the Medical Technology Association of India, the FTA could open “a new chapter in healthcare cooperation” with success measured not just in economic terms but “in lives improved and saved”. He noted that if the detailed provisions match current announcements, India could expand exports in segments it already specialises in, such as medical textiles, surgical instruments and disposables.

At the same time, European companies could gain from “lower duties, stronger participation in public procurement, and greater incentives for local manufacturing and R&D”, Choudary said. From a patient perspective, he said, any reduction in device tariffs should translate into “improved affordability and access to advanced therapies”, agreeing a test case for how trade policy can reinforce health systems.

As negotiators move from announcement to implementation, the industry across pharmaceuticals and MedTech agreed on one thing: the India-EU FTA’s real impact will depend less on broad tariff headlines and more on how its detailed rules balance openness with domestic capability, competition with collaboration, and trade growth with patient safety.

WHAT DOES INDIA GAIN?

European pharmaceutical majors are positioning India’s expanding healthcare market as a growth destination for premium biologics and patented therapies.

Indian drugmakers, meanwhile, are targeting opportunities in the EU, particularly in biosimilars and complex generics – a segment estimated to be worth about $2 billion.

The EU is already one of India’s most important pharmaceutical export destinations. According to government data, in the financial year 2024-2025, India’s drug exports to Europe were valued at around $5.8 billion.

A substantial majority of this trade is driven by generic formulations and biosimilars. Active pharmaceutical ingredients and vaccines form the next major categories.

European exports to India, by contrast, are skewed towards patented medicines, biologics and specialised medical and laboratory equipment. At the same time, Indian pharmaceutical manufacturing remains closely tied to Europe for critical upstream supplies, including production and quality-testing equipment, reagents, key APIs and specialised solvents.

The EU has made it clear that the trade agreement does not dilute regulatory oversight. All pharmaceutical imports from India will continue to fully comply with the EU’s rigorous health, safety and product quality standards without carve-outs or relaxations.

“Sensitive European agricultural sectors will be fully protected, as products such as beef, chicken, meat, rice and sugar are excluded from liberalisation in the agreement. All Indian imports will continue to have to respect the EU’s strict health and food safety rules,” the press release stated.