Indian tariffs on EU pharma and chemical exports will drop to zero from the current 11 per cent and 22 per cent, respectively.
The European Union’s (EU’s) offer to slash tariffs on 97.5 per cent of Indian chemical exports to zero is set to give India’s pharmaceutical and medical device firms preferential access to the European markets.
Illustration: Uttam Ghosh
Key Points
- India’s pharma exports to Europe were roughly $5.8 billion in 2024-25
- Generic drug formulations and biosimilars accounted for 75-80 per cent of the exportsSecond line.
- The deal also eliminated tariffs of up to 6.7 per cent across 99.1 per cent of trade lines
Under the new framework, the EU will eliminate duties of up to 12.8 per cent to zero, a move expected to catalyse growth in bulk and specialty chemicals.
Similarly, 90 per cent of medical and surgical equipment will see tariffs fall from 27.5 per cent to zero.
Reciprocally, Indian tariffs on EU pharma and chemical exports will drop to zero from the current 11 per cent and 22 per cent, respectively.
“The expected removal of EU tariffs of up to 11 per cent on pharma will enhance trade and support greater access to innovative medicines for Indian patients,” Sudarshan Jain, secretary general at the Indian Pharmaceutical Alliance, said.
What does the deal mean for Indian pharma cos
While Indian pharma already enters the EU duty-free, the deal would still provide preferential access to the EU market and improve competitiveness for medical devices.
The near-zero tariff access is also expected to strengthen the position of Indian formulations, active pharma ingredients (APIs) and value-added medicines in the EU.
India’s pharma exports to Europe were roughly $5.8 billion in 2024-25, accounting for 19-21 per cent of India’s overall pharma exports.
According to industry data, generic drug formulations and biosimilars accounted for 75-80 per cent of the exports, followed by bulk drugs (APIs) and vaccines.
Similarly, it also allows Indian generic manufacturers to vie for the EU’s $2 billion market for biosimilars and complex generics.
“This development is particularly consequential for India’s pharma micro, small and medium enterprises, many of whom possess strong quality capabilities but face cost and access barriers in highly regulated markets,” said Namit Joshi, chairman at the Pharmaceuticals Export Promotion Council of India (Pharmexcil).
What experts say
Experts add that the reduced import duties, easier regulatory pathways, and deeper technology collaboration can lower the cost of advanced therapies for Indian patients.
“In the short term, we foresee a mild price reduction of 10-20 per cent, but the real impact will unfold over the next two to three years, with prices potentially dropping by 40-70 per cent once local manufacturing scales up, biosimilars enter the market, and patent expiries align,” said Saurav Ojha, cofounder and whole-time director at Iberia Pharmaceuticals. Joshi added that beyond tariffs, enhanced cooperation on non-tariff barriers, regulatory transparency, and Customs facilitation will materially improve ease of doing business by reducing friction and timelines, helping most smaller exporters.
How the stock market reacted
The stock market’s reaction to the deal remained positive, with the Nifty Pharma index rising 0.3 per cent.
Major gainers included JB Pharma and Torrent Pharmaceuticals (both up 1.7 per cent), followed by Glenmark Pharmaceuticals (up 1.6 per cent) and Zydus Lifesciences (up 1.3 per cent). Laurus Labs (down 1.6 per cent), Mankind Pharma (down 0.6 per cent) and Ipca Labs (down 0.5 per cent) were the top losers on Tuesday.
The deal also eliminated tariffs of up to 6.7 per cent across 99.1 per cent of trade lines for India’s medical instruments, appliances, and vital supplies built on cutting-edge manufacturing, innovation, and skilled talent.
“This would enable cost-competitive entry in European markets for lenses, spectacles, medical devices, measuring and testing instruments,” the Ministry of Commerce and Industry said in a factsheet.
Currently, Indian medical technology (medtech) firms operating in the EU engage with a highly structured and challengingly expensive and detailed regulatory environment.
India’s medtech exports to the EU
India’s medtech exports to the EU primarily include medical consumables and low-to-mid risk devices such as catheters, cannulae, gloves, dressings, and certain diagnostic and laboratory products.
“The free trade agreement (FTA) can support the medtech sector by facilitating tariff rationalisation on medical devices, components, and raw materials, which can improve affordability and competitiveness,” said Rajiv Nath, forum coordinator at the Association of Indian Medical Device Industry (AiMeD).
He added that the agreement must ensure a level playing field for Indian medtech manufacturers, with fair regulatory alignments and safeguards against predatory imports, especially from third countries.
India-EU FTA and traditional medicines
Beyond goods, the FTA is also expected to provide a boost to Indian traditional medicine services and practitioners.
“In the EU member states where regulations do not exist, AYUSH (ayurveda, yoga and naturopathy, Unani, Siddha, and homoeopathy) practitioners will be able to provide their services using the professional qualifications they gain in India,” the commerce ministry said.
It added that the FTA also provides future certainty and locks in the openness of the EU for the establishment of AYUSH wellness centres and clinics in the EU member states.
