Following nearly two decades of negotiations, the European Union (EU) and India formally reached a comprehensive free trade agreement (FTA) on January 26, 2026. This strategic move aims to strengthen economic and political ties between the two regions amid global market instability and rising tariff pressures from the United States.
A cornerstone of the agreement is the removal of trade barriers for several key industries. Specifically, India has committed to phasing out the majority of its 11% import tariff on European pharmaceuticals. According to the outlined schedule, the reduction process is expected to take between 5 and 10 years. This adjustment is significant, considering EU pharmaceutical exports to India reached approximately €1.1 billion in 2024.
Beyond healthcare products, key facts of the deal include:
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Tariffs: Drastic cuts or total elimination of duties on machinery (currently up to 44%), chemicals (22%), and agri-food products such as wine and olive oil.
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Intellectual Property: Establishing a robust protection framework and aligning the intellectual property laws of both parties to create a secure environment for innovation-driven businesses.
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Growth Objectives: The EU anticipates doubling its export value to India by 2032, with projected annual savings of approximately €4 billion in duties for European companies.
This partnership not only opens a combined market of over 2 billion people but also allows both sides to reduce reliance on traditional raw material sources for medicines, thereby enhancing the autonomy and resilience of the global medical supply chain.