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The European Union's preference for India over China in the pharmaceutical sector is rooted in several strategic factors including the access to qualified and skilled workforce. India has a proven track record of being a reliable supplier of generic medicines and vaccines. The Covid-19 pandemic underscored India's capacity to supply essential pharmaceuticals at scale, including vaccines.
The absence of a comprehensive Free Trade Agreement (FTA) between the EU and India limits the potential for reducing tariffs and easing market access. Negotiations have been going on but have faced hurdles related to intellectual property rights, market access for agricultural products, and investment protection, noted experts at the ongoing 18th edition of PharmaTech & LabTech Expo at Bengaluru International Exhibition Centre (BIEC), Bengaluru.
The EU and other global markets are seeking to reduce dependency on China for active pharmaceutical ingredients (APIs) and other critical components due to geopolitical tensions and supply chain vulnerabilities.
Indian pharmaceutical companies are increasingly aligning with global regulatory standards, including those of the European Medicines Agency (EMA). Indian firms have a significant number of FDA and EMA-approved manufacturing facilities.
In the seminar on Enhancing EU India Pharmaceuticals Sector, Robin Banerjee, senior vice president, The Council of EU Chambers of Commerce in India (EU Chambers) & chairman, Nucleon Research said that even as FTA between EU and India is unlikely in the short-term, there is a huge opportunity for Indian pharma skills. Here India is insisting for simplification of the visa rules for its workforce. But Indian pharma needs to instil the philosophy of ethical business practices, reassure its quality practices in manufacture and supply chain management.
Also from January 1, 2026, EU is imposing the Carbon Border Adjustment Mechanism (CBAM) to reduce carbon emissions and encourage cleaner industrial production. The impact of CBAM on India will depend on the carbon intensity of its exported products and their substitutes in the EU market even for pharma exports, stated Banerjee.
Noting that Indian pharmaceutical production offers cost advantages while maintaining high-quality standards, the EU values sustainable and ethical production practices. Indian firms, focusing more on green manufacturing and compliance, align better with EU policies compared to China. While progress has been made, some EU countries maintain stringent regulatory requirements, which can be challenging for Indian exporters.
The EU's interest in strengthening ties with India in the pharmaceutical sector is likely to grow, especially as geopolitical and economic factors encourage diversification from China.
Azmath Syed Ulla, vice president, business development, Medreich said EU and India to strengthen their pharmaceutical ties will need regulatory cooperation, reduce time taken for registrations, reducing trade tariffs for medicines and medical devices.
At a power packed panel discussion to deliberate on the topic Unlocking Growth: EU-India Pharma Sector, Rajnish Agrawal, managing director, Emball ISO India Packaging, Ing. Hana Onderkova, director, Czech Trade Bengaluru, Harish K Jain, director, Embiotic Laboratories and president, Federation of Pharma Entrepreneurs, Jayant Nadiger, Trade & Investment Commissioner, Flanders Belgium stated that aaccelerating the EU-India FTA negotiations could unlock the full potential of this partnership, fostering greater collaboration in innovation, manufacturing, and trade.
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