India-EU FTA may lower costs of novel drugs for Indian patients, medical equipment

Customs duties on pharmaceutical exports from Europe to India will drop from 11 percent to zero for almost all products. This will increase Indian patients’ access to new medicines from Europe and reduce input costs of specialty raw materials imported from Europe, industry executives said.

According to a fact sheet published by the European Commission, European pharmaceutical exports to India will reach €1.1 billion in 2024.

“The expected removal of EU tariffs of up to 11 per cent on medicines will boost trade and support greater access to innovative medicines for Indian patients,” Sudarshan Jain, secretary general of the India Pharmaceutical Alliance, said in a statement. he said.

“We expect a slight price decline of 10-20 per cent in the short term, but the real impact will come in the next 2-3 years; prices will potentially fall by 40-70 per cent as local manufacturing scales, biosimilars enter the market and patent durations align,” said Saurav Ojha, co-founder and director of Gurugram-based Iberia Pharmaceuticals. “This change is particularly critical in the context of weight loss drugs of the GLP-1 class, such as semaglutide and tirzepatide.

India imports drugs from Europe in key therapeutic areas such as oncology, biologic and monoclonal antibodies, insulin analogues and GLP-1 agonists, as well as mRNA and viral vector vaccines.

Benefits for Indian companies

Europe is India’s second largest pharmaceutical export market with sales of $5.8 billion in FY25. According to an Emkay Global Services report dated January 24, India accounts for 2.2 percent of the EU’s total pharmaceutical imports, indicating a significant gap for growth.

While Indian pharmaceutical products already face zero duty entry into the EU, the agreement is expected to expand access, especially to small and medium-sized businesses.

“Reducing tariffs and smoother market entry will directly enhance their (MSMEs’) ability to scale exports, invest in compliance and integrate into European supply chains,” said Namit Joshi, chairman of the Pharmaceutical Export Promotion Council of India (Pharmexcil).

“Indian companies continue to face significant non-tariff barriers in the EU; approval times often extend to 2-3 years, delaying commercialization; registration fees can reach up to €300,000, creating a financial hurdle,” Emkay said in its report. he said.

Details on how the trade deal will impact regulatory processes are awaited, but streamlining them is expected to provide the most benefits for Indian exporters.

The agreement strengthens intellectual property protections provided under the TRIPS agreement and confirms the Doha Declaration, under which governments can override patents if necessary, as the EU pushes for stricter intellectual property measures such as data exclusivity that could delay the entry of generic drugs.

Medtech tariffs reduced

Customs duties on medical equipment exports from Europe to India have also been reduced from 27.5% to zero for 90% of products. Domestic medical device manufacturers, on the other hand, are acting cautiously, seeking more interventions to strengthen domestic production, where imports are very intense.

“The India-EU FTA should ensure a level playing field for India’s medical device manufacturers,” said Rajiv Nath, forum coordinator at industry body AiMed.

MintHe added that the agreement must have “fair regulatory compliance” and “safeguards against predatory imports”, especially from third world countries. He said that the industry is waiting for the detailed text of the agreement.