EU-India FTA: The Strategic Calculus Beyond Tariff Savings for Healthcare

The EU–India Free Trade Agreement (FTA) introduces a structural shift for the global healthcare sector by reshaping how pharmaceuticals, medical devices, APIs, and healthcare services move between two deeply interconnected markets. While public discourse has largely focused on tariff elimination, the agreement’s more durable impact lies in how it reshapes cost predictability, regulatory confidence, and long-term supply-chain design.

This isn't an incremental adjustment. The FTA represents a structural reconfiguration of how medicines, biologics, and medical technologies move between two of the world's largest healthcare markets. But tariff elimination is the easy part. The harder questions, around regulatory harmonization, supply chain concentration risk, and geopolitical responses, will determine who captures value and who is forced to re-optimize later.

The Deal in Context: What Changed on Day One

Immediate Tariff Elimination

The FTA removes duties on over 90% of tariff lines across both regions.

• EU Eliminates: ~11% tariffs on Indian pharmaceuticals, APIs, vaccines, and medical devices.
• India Eliminates: Significant duties on EU biologics, advanced therapies, and precision medical equipment.

This creates immediate cost relief. A mid-scale Indian API manufacturer supplying to Germany, previously facing 11% import duty, now ships at near-zero tariff. A European biologics company exporting to India sees similar savings.

The Scale of Opportunity, What the Numbers Indicate

The EU–India FTA opens USD 572.3 billion in market access for Indian pharmaceutical and MedTech exports to Europe from 2027 onward, while giving European drugmakers preferential entry into India’s growing oncology, immunology, and rare-disease markets.

According to Mordor Intelligence, India’s pharmaceutical contract manufacturing market is set to grow at a 12.8% CAGR through 2030, with 18–22% of new capacity additions tied to EU partnerships, pointing to strategic repositioning rather than cost arbitrage alone.

Trade data underscores the imbalance. In 2024, India imported USD 859.3 million in medicaments from Europe, accounting for 70.4% of its global pharma imports, reflecting Europe’s strength in high-value therapies. India’s exports to the EU reached ~USD 6 billion in FY 2025, spanning formulations, biosimilars, APIs, and vaccines (Indian Department of Pharmaceuticals).

Scenario Planning: What Happens Next?

We're observing three emerging scenarios. 

Potential Scenarios for EU–India Healthcare Supply Chains

Source: Mordor Intelligence

Where the Savings Are Real and Where They're Not

High-Impact Categories: Immediate Cost Relief 

A. Generic APIs and Formulations

Indian API manufacturers gain immediate competitiveness in the EU. Previously facing 11% tariffs, they now compete on a level playing field with EU domestic producers. 

With tariffs removed, India’s position as a cost-competitive and reliable API source for Europe strengthens further, reinforcing volume-driven trade dynamics across the Active Pharmaceutical Ingredients Market.

High-Value API Exports from India: EU vs. Non-EU 

Source: Mordor Intelligence

B. Biosimilars 

India is a global leader in biosimilar development. The FTA reduces landed costs for biosimilars entering the EU by an estimated 12-15%, according to industry cost modeling. 

While tariff relief marginally improves affordability, pricing and adoption remain shaped by IP regimes and reimbursement frameworks, dynamics that continue to define competition within the Biosimilars Market.

Illustrative Pricing Context 

Source: Mordor Intelligence

C. Medical Devices and Diagnostics 

India's medical device exports to Europe, valued at USD 139.85 million (29.9% of India's global device exports), benefit from tariff elimination. European hospitals and clinics gain access to cost-effective diagnostic equipment, surgical instruments, and consumables. Lower landed costs support wider adoption of diagnostics and surgical equipment in Europe, reinforcing India’s role in global device supply chains tracked across the Medical Devices Market.

Low-Impact Categories: Where Regulatory Friction Dominates

Not all categories benefit equally. Advanced therapies, cell and gene therapies, and novel biologics face significant regulatory hurdles that tariff elimination alone cannot solve. 

India’s Healthcare Exports: Europe in Global Context 

EU–India FTA Impact on India’s Healthcare Export Mix

Source: Mordor Intelligence

Europe already represents a significant destination for Indian healthcare exports. The FTA primarily reinforces existing trade corridors rather than creating new ones. 

Supply Chain Integration: Gradual, Not Automatic 

Trade agreements influence not only pricing but also the underlying logic of supply chains. In healthcare, where reliability and compliance are critical, integration tends to be incremental. 

The FTA encourages: 

• EU companies to source APIs and intermediates from India as part of diversification strategies.
• Indian manufacturers to integrate European technologies, quality systems, and standards.

In 2024, EU–India goods trade exceeded EUR 120 billion (USD 1.41 trillion), with services adding EUR 66 billion (USD 77 trillion). India’s pharmaceutical exports reached USD 27.8 billion in 2023, supplying an estimated 8–20% of global API demand. The agreement supports diversification rather than relocation. Most firms are adding India–EU links alongside existing suppliers, not replacing them outright. 

As firms balance cost efficiency with regulatory resilience, execution readiness across traceability, compliance, and dual sourcing becomes critical, reshaping priorities within the Healthcare Supply Chain Management Market.

Supply Chain Redesign: Three Models Emerging

• Nearshoring to India for Cost: EU firms expand Indian footprints to leverage 30–50% lower API development costs and 60–70% lower labor costs.
• Indian CDMOs Expanding EU Footprints: Firms like Syngene International (which extended its BMS collaboration through 2035) are moving into integrated R&D and regulatory services. This shift reinforces the growing role of Indian CDMOs as integrated partners rather than low-cost suppliers, a structural trend shaping capacity expansion, regulatory services, and long-term collaboration across the Pharmaceutical Contract Manufacturing Market.
• The Hybrid Dual-Hub: Innovation and high-value manufacturing remain in the EU, while scale manufacturing is shifted to India.

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The Challenges That Will Define Success

1. Non-Tariff Barriers (NTBs)

Regulatory approvals, quality certifications, and compliance timelines can delay or negate cost benefits. A zero-tariff API still requires EMA or CDSCO approval, GMP certification, and ongoing audits. 

2. Trade Facilitation Costs 

Customs procedures, documentation, testing, and logistics continue to add cost and time. SMEs may struggle with compliance complexity, while larger firms with established trade infrastructure capture disproportionate early gains. 

3. Intellectual Property Balance

The FTA retains India’s TRIPS-compliant IP regime, balancing innovation protection with generic manufacturing flexibility. While European innovators seek stronger enforcement, Indian generics depend on continued flexibility. The agreement preserves the status quo, though future amendments could shift this balance. 

Executive Summary: Three Things That Matter Most

Source: Mordor Intelligence

Want deeper insights on how the EU–India FTA is reshaping healthcare trade? Explore our market analysis across Pharmaceuticals, Health Services, and Medical Devices reports.