The signing of the India-EU Free Trade Agreement after almost two decades of negotiations is being hailed as the ‘mother of all deals’ for its impact across segments.
The deal is expected to be signed this year, and may come into effect early next year. While we await the fine print, it is already obvious that a lot hinges on the India-EU trade deal.
Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance analyses that the expected removal of EU tariffs of up to 11 per cent on pharmaceuticals will enhance trade and support greater access to innovative medicines for Indian patients. He also points out that the agreement reinforces the intellectual property framework under the TRIPS Agreement and the Doha Declaration, which will further strengthen trade opportunities and collaboration between India and the EU.
At the individual company level, such FTAs give management the runway to make long term investments. As Ashok Nair, MD, RPG Life Sciences puts it, “The agreement creates a strong incentive for Indian companies to invest further in quality, compliance and innovation aligned with global standards. Over time, this will support capacity expansion, employment generation and greater R&D investments within India, while ensuring that European patients benefit from reliable as well as cost-effective pharmaceutical solutions.”
Namit Joshi, Chairman, Pharmexcil stresses that the India–EU FTA is not a short-term export stimulus; it is a long-term competitiveness framework that empowers MSMEs and positions Indian pharma for resilient, quality-led growth. He reasons that the FTA delivers structural competitiveness as near-zero tariff access significantly strengthens the position of Indian formulations, APIs, and value-added medicines in the EU, a development that is particularly consequential for India’s pharma MSMEs, many of whom possess strong quality capabilities but face cost and access barriers in highly regulated markets. Reduced tariffs and smoother market entry will directly enhance their ability to scale exports, invest in compliance, and integrate into European supply chains.
From Pharmexcil’s lens, this agreement enables stable, long-term, and predictable pharmaceutical trade, benefiting European healthcare systems and consumers through improved affordability, continuity, and security of supply, supported by India’s high-quality and reliable manufacturing base. Joshi also places equal importance on the agreement’s balanced approach to intellectual property, which reaffirms TRIPS-aligned protections while safeguarding India’s strengths in generics and public health, thereby providing regulatory certainty and confidence for MSMEs as well as large manufacturers.
The India-EU FTA could be particularly game changing for MSME pharma companies. As Saurabh Agarwal, Director, HAB Pharma explains, “The removal of the 11 per cent tariff meaningfully alters the cost–competitiveness equation, enabling Indian manufacturers to participate in one of the world’s most regulation-intensive healthcare markets on far more equitable terms. Improved cooperation on non-tariff barriers, customs facilitation, and regulatory alignment will significantly reduce friction for MSME exporters—where time, cost, and predictability are decisive factors.”
But policies and FTAs take a long while to actually materialise, more so one with a bloc of 27 countries. And execution and interpretation challenges could slow down implementation.
Take the US Biosecure Act for instance. When it was first being discussed in 2024, India’s pharma companies were upbeat that the Act might create a sweet spot for India’s pharma contract development and manufacturing organisations (CDMOs) as it proposed restricting US government transactions with Chinese based pharma CDMOs. However, the watered down version of the Act, which was signed into law by President Trump on December 18, 2025, diminishes the opportunity for India’s CDMO segment. Contrary to initial speculation, the Act does not name specific countries or companies on the restricted list.
In a recent BNP Paribas India report, dated January 2026 Tausif Shaikh, pharma and healthcare analyst referred to conversations with China-based CDMO, WuXi Biologics, highlighting that the company secured 86 new projects in 1H25, with over half coming from the US. WuXi is also building new capacities in the US. Thus Shaikh speculates that the earlier expectation of Indian companies benefiting from the diversification of the supply chain from China has now tapered due to the muted version of the revised Biosecure Act. The Office of Management and Budget (OMB) has to publish a list of “biotechnology companies of concern” (BCC) within a year of enactment, which is by December 2026, so that’s the next tracking point on this policy.
The tricky nature of trade negotiations, policy formation and implementation keeps industry on tenterhooks. But out of turmoil, could come the trigger for really moving the needle beyond transactions to a new global order built on mutual growth. Especially with the hanging sword of the ongoing tariff war with the US. Let us hope that the India-EU FTA lives up to these promises. India-EU FTA offers new hope
VIVEKA ROYCHOWDHURY,
Editor
viveka.r@expressindia.com
viveka.roy3@gmail.com