Significant tariff reductions on pharmaceutical and optical, medical, and surgical equipment exports from Europe to India are part of India’s historic free trade agreement with the European Union, which was finalized on Tuesday.
Impact on Pharmaceutical Imports from Europe
Pharmaceutical shipments from Europe to India would no longer be subject to tariffs, which were previously 11% on nearly every product. According to industry experts, this will lower input prices for specialist raw materials imported from Europe and increase Indian patients’ access to innovative medications from Europe.
In 2024, Europe exported €1.1 billion worth of pharmaceuticals to India, according to a European Commission fact report.
Statements from Industry Leaders
According to a statement by Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, “the anticipated reduction of EU tariffs of up to 11% on pharmaceuticals will improve trade and encourage better access to breakthrough medicines for Indian patients.”
“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,” stated Saurav Ojha, director and co-founder of Iberia Pharmaceuticals in Gurugram. This change is especially important when it comes to GLP-1 class weight-loss medications like tirzepatide and semaglutide.
Major Therapeutic Categories Imported from Europe
Biologics, monoclonal antibodies, insulin analogues, GLP-1 agonists, mRNA, and viral vector vaccines are among the major therapeutic categories that India buys from Europe.
With $5.8 billion in sales in FY25, Europe is India’s second-largest pharmaceutical export market. According to an Emkay Global Services research dated January 24, India contributes for 2.2 percent of the EU’s overall pharmaceutical imports, indicating the significant headroom for expansion.
Impact on Indian Pharmaceutical Market
The agreement is anticipated to increase access, particularly for small and medium-sized businesses, even though Indian pharmaceutical items now have zero duty entrance into the EU.
According to Namit Joshi, head of the Pharmaceuticals Export Promotion Council of India (Pharmexcil), “lower tariffs and easier market entrance will immediately boost their (MSMEs) ability to grow exports, invest in compliance, and integrate into European supply chains.”
Non-Tariff Barriers and Regulatory Challenges
According to Emkay’s study, “Indian enterprises continue to face considerable non-tariff barriers in the EU, with approval timeframes often stretching to 2-3 years, delaying commercialization; registration fees can reach as high as €300,000, establishing a material barrier.”
Although specifics about how the trade agreement will affect regulatory procedures are still pending, it is anticipated that Indian exporters will gain the most from streamlining them.
Intellectual Property and Doha Declaration
The agreement upholds the Doha Declaration, which permits governments to override patents when necessary, and strengthens the intellectual property protections offered by the TRIPS agreement, despite an EU push for more stringent intellectual property measures like data exclusivity that could postpone the entry of generic medications.
Medical Equipment Imports
Additionally, 90% of European medical equipment exports to India now have zero tariffs, down from 27.5%. Medical equipment manufacturers in the country are wary and have looked for additional initiatives to boost local manufacturing, which is heavily dependent on imports.
“A equal playing field for India’s medical equipment producers must be ensured under the India-EU FTA,” Rajiv Nath, forum coordinator of trade association AiMed, told Mint. He stated that “fair regulatory alignment” and “safeguards against predatory imports,” particularly from third-world nations, are essential components of the accord.
💊 EU Pharma Tariff Cuts
- Tariff Reduction: Up to 11% removed on European medications
- Impact: Lower input costs and better access for Indian patients
- Key Medicines: Insulin analogues, GLP-1 drugs, biologics, cancer therapies
- Price Effect: Short-term 10-20%, long-term 40-70% drop
- Benefit: Encourages local manufacturing and biosimilar entry
🏥 Medical Equipment & Safeguards
- Tariff Reduction: 90% of European medical devices now duty-free
- Domestic Concern: Ensure equal playing field for Indian manufacturers
- Regulatory Needs: Fair alignment & protection against predatory imports
- Impact: Boosts local production & encourages investment
Frequently Asked Questions
1. For Indian patients, what is the main advantage of the India-EU free trade agreement?
The agreement eliminates up to 11% import taxes on European medications, making innovative and life-saving medications more affordable and available to Indian patients, particularly in the treatment of obesity, diabetes, and cancer.
2. To what extent may this deal reduce medicine prices in India?
Prices could drop by 10% to 20% in the near future. Prices may decrease by 40–70% over the next two to three years as local production grows, biosimilars hit the market, and patents expire.
3. Which medications stand to gain the most from lower tariffs?
The greatest impact is anticipated for expensive treatments including insulin analogues, GLP-1 medications (such as tirzepatide and semaglutide), biologics, cancer medications, monoclonal antibodies, and sophisticated vaccinations.
4. What impact does the FTA have on Indian pharmaceutical exports to Europe?
The agreement is anticipated to increase market access, particularly for MSMEs, by lowering trade barriers and facilitating integration into European supply chains. Currently, Indian pharmaceuticals enter the EU at zero tariff.
5. Are there issues with medical devices and intellectual property?
Indeed. Even while the agreement preserves the protections of the Doha Declaration and TRIPS, Indian businesses still have to deal with lengthy approval processes and expensive EU registration fees. Predatory imports and unfair competition are further concerns for domestic manufacturers of medical devices.
Conclusion
With tariff reductions expected to drastically lower the cost of cutting-edge medications and medical equipment, the India–EU Free Trade Agreement represents a big step toward affordable healthcare in India.
The true benefits will depend on regulatory simplification, fair competition protections, and implementation clarity, even though patients and pharmaceutical exporters stand to win. If carried out successfully, the agreement might improve India’s standing in international pharmaceutical commerce and change its access to cutting-edge medications.
Disclaimer
The information provided is for general informational purposes only and does not constitute professional, medical, or financial advice. Readers should consult relevant experts before making decisions.
