India–European Union (EU) Free Trade Agreement (FTA) has been described as “mother of all deals” as this deal created the world’s largest free trade zone. The deal encompasses 2 billion people and about 25% of the world’s Global Domestic Product (GDP). In this background, European Commission President Ursula von der Leyen said that “we have delivered the mother of all deals. This is a tale of two giants – the world’s second- and fourth-largest economies”. The EU and India concluded negotiations on January 27, 2026, after the 14th and last negotiating round took place in October 2025. It took almost two decades to conclude negotiations for a FTA which were initiated in 2007. After suspension of talks in 2013, negotiations were relaunched in 2022.
The conclusion of negotiations unlocked access to the $572.3 Bn EU Pharmaceuticals and Medical Devices market for Indian Pharma and MedTech Industry. Importance of EU can be vouched from the fact that four out of the top five European markets – Germany, France, Italy, and Spain – are part of European Union. Medicine spending in these top 5 Western European Markets (WE5) stood at $226 Bn in 2023, and is expected to reach $296 Bn by 2028. The United Kingdom (UK) is part of WE5 but it left the EU on January 31, 2020.
Europe is an important market for Indian pharma industry as European region is the second largest market for Indian pharma exports with 18.93 per cent share in overall exports of pharmaceuticals. North America Free Trade Agreement (NAFTA) region (the US, Canada, and Mexico) is the largest market for Indian pharma exports with 37.63 per cent share. India pharma exports to Europe comprise APIs, formulations, vaccines, and biosimilars. For FY25, pharma exports to the Europe stood at $5.77 Bn, and out of this, exports of pharmaceuticals to European Union stood at $4.39 Bn.
Imports from EU for FY25 stood at $1.3 Bn which mainly consisted of patented pharma products. Ireland is a leading country in export of pharmaceutical products. In 2024, Ireland exported pharmaceutical products worth €99.9 billion across the world. The top exports from Ireland to India were Orthopaedic Appliances worth $132 Mn, and Vaccines, blood, antisera, toxins, and cultures worth $122 Mn. India’s pharma exports to Ireland stood at $108.35 Mn. Elimination of tariffs – ranging up to 11.0 per cent on pharma products will make import from EU cheaper.
European (08) and EU (06) countries dominate the list of top pharma exporting nations in value terms. Germany ranked number 1 in pharma exports in 2023 with an export of about $126 Bn, followed by Switzerland ($118 Bn), US ($105 Bn), Ireland ($97 Bn), Belgium ($91 Bn), Italy ($54 Bn), China ($51 Bn), France ($42), Netherlands ($38 Bn), and UK ($32 Bn). Even in volume terms, two countries from European Union namely France (rank: 2), and Germany (rank: 5) figure among top 5 countries. There was marginal difference in the quantity exported by India (rank: 3), the US (rank: 4), and Germany in 2023.
Pharma exports of $5.77 Bn for FY25 from India is a small proportion in the background that medicine spending in WE5 itself was $226 Bn in 2023. Immense potential exists as the population of the EU was estimated at 450.4 million as on January 1, 2025. In 19 EU countries, the population increased in 2024 while in decreased in eight. For FY25, exports to 12 countries out of 27 European Union countries showed a decline. In 3 out of 5 top countries for pharma exports, the decline was observed for FY25.
This is pertinent to note that there are European countries which are not part of EU but are major markets for Indian pharma exports, e.g., the UK which is the second largest market for Indian pharma exports forming 3.0 per cent of total pharma exports. Switzerland (0.47% share), Georgia (0.09%), Serbia (0.06%), Norway (0.03%), Iceland (0.02%), Albania (0.01%), etc. are not part of European Union but are destination for Indian pharma exports.
Factsheet regarding India and European Union Trade Agreement as released by the Department of Commerce points out that the deal will expand horizons for Indian Traditional Medicine by providing a boost to Indian traditional medicine services and practitioners. AYUSH practitioners based on their professional qualifications in India will be allowed to provide their services in those EU Member States where regulations do not exist. As per the FTA, there is openness of the EU for establishment of AYUSH wellness centres and clinics in the EU Member States. Trade in Indian Traditional Medicine services will get push due to greater exchange with EU.
The FTA also recognizes the importance of digital libraries, specifically the Traditional Knowledge Digital Library (TKDL) project initiated by the Council of Scientific & Industrial Research (CSIR) to protect Indian traditional medicinal knowledge and prevent its misappropriation at International Patent Offices. It was TKDL that set international specifications and standards for setting up of TK databases based on TKDL specifications. In the 5th Session of the Intergovernmental Committees (IGC) of the World Intellectual Property Organization (WIPO) on Intellectual Property and Generic Resources, Traditional Knowledge, and Expression of folklore, this was adopted in the year 2003.
India’s pharma exports in FY25 worth $30.47 Bn comprised Drugs, formulations & Biologicals (75.26%), followed by Bulk Drugs & Drug Intermediates (15.98%), Vaccines (4.01%), Surgicals (2.48%), and Ayush & Herbals (2.26%). In contrast to this, India’s pharma imports in FY25 worth $8.93 Bn comprised Drugs, formulations & Biologicals (27.21%), followed by Bulk Drugs & Drug Intermediates (51.81%), Vaccines (4.55%), Surgicals (14.74%), and Ayush & Herbals (1.68%).
To conclude, it can be said that EU-India FTA will open avenues for Indian Pharma Industry (IPI). Contract Development and Manufacturing Organizations (CDMOs) are likely to gain. Loss of Exclusivity will add to the gains for IPI. But to tap this opportunity, IPI must strengthen quality systems, and compliance as European market is a highly regulated market.
Dr. Anil Kumar Angrish- Associate Professor (Finance and Accounting) and In-Charge, Department of Pharmaceutical Management, NIPER S.A.S. Nagar (Mohali), Punjab
Disclaimer: Views are personal and do not represent the views of the Institute.
