India-EU FTA: Pharma Data Exclusivity Standoff Explained

Pharmaceutical businesses in Europe and India will be anxiously awaiting the fine print as the two countries are scheduled to sign a historic free trade agreement (FTA) on January 27.

India–EU Free Trade Agreement and Pharmaceutical Sector Impact

The EU has been pushing for TRIPS-plus protections, such as tighter patent regulations, longer data exclusivity for pharmaceuticals, and stronger enforcement, while New Delhi has worked to maintain the intellectual property rights (IPR) flexibilities provided by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, according to sources.

Sources claim that India has cautioned that such rules would increase the price of medications and undermine its generic pharma business, which is a major global provider of reasonably priced medications.

India’s Generic Pharma Concerns and Export Exposure

According to figures from the commerce ministry, between 19 and 21 percent of India’s pharmaceutical exports—roughly $5.8 billion in FY25—went to Europe. Biosimilars and generic medicine formulations make for 75–80% of exports, with bulk medications (APIs) and vaccines coming in second and third, respectively.

High-value patented medications, biologics, and specialized medical equipment are the EU’s main exports. The Indian sector is largely dependent on Europe for manufacturing and testing equipment, reagents, active pharmaceutical ingredients (APIs), and specialty solvents, despite the exports appearing modest.

TRIPS Flexibilities and India’s Public Health Safeguards

India’s IPR laws can be tailored to prioritize public health thanks to TRIPS flexibilities, mainly through tight patentability requirements (Section 3(d)), parallel imports (bringing genuine, trademarked items into a country without the IP owner’s consent in that area), and mandatory licensing.

In addition to preventing “evergreening” of patents and guaranteeing access to healthcare, these regulations make it possible to produce generic, reasonably priced medications.

Tariff Imbalances and Market Access Issues

For a long time, the pharmaceutical tariff environment has been unfair. Currently, Indian pharmaceutical companies may enter the 27-nation bloc with almost little difficulty, as import taxes are either zero percent or very close to zero percent.

In India, where levies on chemicals and pharmaceuticals average 9.9 percent and can reach 28 percent for specific medical equipment, European life sciences behemoths like Sanofi and Bayer must contend with high tariffs.

Tariff Phase-Out and Market Expansion

In recent years, India has eliminated all tariffs on a number of cancer and rare prescription treatments.

High-end European biologics and specialty medications will have a lower entry hurdle thanks to India’s anticipated phase-out of these tariffs over the next ten years under the FTA.

Data Exclusivity: The Core Dispute

One of the difficult aspects of the more than ten-year-long negotiations was data exclusivity (DE).

According to reports, the EU lobbied for a data exclusivity period of six to ten years, which would prevent Indian authorities from approving generic equivalents using clinical trial data from innovators.

For Brussels, DE is an essential safeguard for the billions of dollars invested in R&D. It is a “backdoor monopoly” for New Delhi.

If approved, DE would prohibit Indian generic manufacturers from releasing reasonably priced medications even after a patent expires, unless they conducted more expensive and “unethical” clinical trials.

India’s Negotiation Strategy and UK Precedent

According to the source, India’s negotiators were uncompromising because they saw DE as an existential danger to their country’s position as the “Pharmacy of the Global South.”

An important precedent that supported this position was the August 2025 signing of the Comprehensive Economic and Trade Agreement (CETA) between the United Kingdom and India.

According to insiders, the EU might have sought “small changes” rather than making a strong push on DE and IPR.

There is also an FTA template between the UK and India.

London abandoned its aspirations for patent term extensions and data exclusivity in favor of a “balanced” IPR framework in the July India-UK agreement.

The agreement gave India the protection it needed for the EU negotiations by safeguarding Section 3(d) of the Indian Patents Act, which prohibits businesses from “evergreening” patents by small modifications.

Opportunities Ahead for Indian and EU Pharma Firms

With newfound confidence, major Indian generic exporters are now targeting the $2 billion EU market for complicated generics and biosimilars.

However, the wealthy urban patient population in India will be more easily accessible to the EU.

Frequently asked questions

1. What is the reason for India’s opposition to EU demands regarding data exclusivity in the FTA?

Because data exclusivity would postpone the release of reasonably priced generic medications even after patent expiration, India is against it. By granting data exclusivity, Indian regulators would be forced to prohibit generics unless manufacturers repeat expensive and morally dubious clinical trials, driving up drug costs and impairing access to public health care.

2. What is data exclusivity and how does it affect producers of generic medications?

Data exclusivity restricts medicinal authorities from approving generic copies for a predetermined amount of time based on an innovator’s clinical trial data. This has a substantial impact on India’s generic medication market by creating a “backdoor monopoly,” which enables pharmaceutical corporations to maintain market dominance after the expiration of their patents.

3. How does India’s pharmaceutical industry profit from TRIPS flexibilities?

India can employ parallel imports, mandatory licensing, and stringent patentability regulations like Section 3(d) of the Patents Act thanks to TRIPS flexibilities. These steps guarantee that India continues to be a worldwide provider of reasonably priced medications, prevent patent evergreening, and lower the expense of pharmaceuticals.

4. Will India lower import taxes on drugs and medical equipment from Europe?

Indeed, over the course of the next ten years, India is anticipated to gradually phase out hefty import levies on European medicines and medical devices under the proposed India-EU free trade agreement. This might open India’s premium healthcare industry to EU companies while lowering the cost of sophisticated biologics and specialized therapies.

5. What impact does the India-UK Free Trade Agreement have on trade talks between India and the EU?

By protecting Section 3(d) but eliminating data exclusivity and patent term extensions, the India-UK Free Trade Agreement established a significant precedent. India now has a stronger negotiation position with the EU thanks to this “balanced IPR framework,” which reduces the likelihood that Brussels would obtain TRIPS-plus safeguards.

Conclusion

India’s strong opposition to data exclusivity and TRIPS-plus intellectual property requirements highlights the country’s dedication to both the survival of its generic pharma industry and access to cheap healthcare.

New Delhi is hesitant to compromise on fundamental public health protections, even though the India-EU Free Trade Agreement is anticipated to increase market access through progressive duty reductions on medicines and medical devices.

India seeks to achieve a balance between embracing European innovation and maintaining its position as the “Pharmacy of the Global South,” with the support of the India-UK free trade agreement.

Disclaimer:
This article is for informational purposes only and does not constitute legal, financial, or trade policy advice. Views expressed are based on publicly available information and sources at the time of writing. Readers should consult official government releases or professional advisors for confirmed details.