EU-India Trade Agreement Sets the Stage for Deeper Strategic and Economic Partnership

The recently concluded India-European Union Free Trade Agreement (FTA) is poised to deliver a substantial boost to India’s pharmaceuticals and medical technology industries by opening access to the EU’s $572.3 billion pharmaceuticals and medical devices market one of the largest markets of its kind globally.Government and industry sources say the agreement will enhance export opportunities, scale up market reach and strengthen India’s role as a global supplier of affordable medicines and health technologies.Under the new trade framework, tariffs on a wide range of pharma and medtech products are being reduced or phased out, offering near-zero duty access to European markets and improving competitiveness for Indian manufacturers. While Indian generic drugs historically entered the EU duty-free, the FTA’s preferential terms and deeper market integration are expected to benefit bulk drugs (APIs), formulations and complex therapeutics as well as medical devices and surgical equipment.Industry analysts highlight that the agreement’s tariff cuts including elimination of duties of up to 11 per cent on pharmaceuticals and up to nearly 28 per cent on medical devices will strengthen Indian firms’ cost position and make high-quality products more price-competitive in Europe’s highly regulated markets. Indian exporters already serve about 19 per cent of their pharma export markets in the EU, but the FTA can accelerate growth across high-value segments such as biosimilars and specialty drugs.Beyond tariffs, the deal also addresses non-tariff barriers and regulatory cooperation, which are critical in healthcare product trade. Improved transparency, customs facilitation and steps toward regulatory alignment are expected to reduce compliance costs, shorten market entry timelines and help smaller manufacturers participate more actively in exports. Experts believe that these structural improvements could drive employment growth, encourage investment in manufacturing capacity and support micro, small and medium enterprises (MSMEs) within India’s pharma ecosystem.The agreement may also lower drug and medical equipment costs for Indian consumers over time as imported inputs and advanced technologies become more affordable. This includes specialised imaging equipment, diagnostic devices and high-end therapeutics that currently attract higher duties and regulatory costs. European firms may also expand their investment in India’s research-based pharmaceutical and medtech sectors, fostering deeper innovation collaboration.This could accelerate innovation across biopharma, biosimilars, advanced medical technologies and digital health solutions, reinforcing India’s growing international stature in healthcare manufacturing and exports.As the pact moves toward ratification by the European Parliament, EU member states and India’s Cabinet, stakeholders are preparing for phased implementation that could reshape global healthcare trade, strengthen supply chains and support affordable access to quality treatments worldwide.

For decades, the story of Indian pharma was written in the language of "volume." It was the "pharmacy of the world" - a massive, low-cost engine churning out millions of generic tablets as a quiet subcontractor for Western brands. But a quieter, more sophisticated revolution has reached its tipping point in 2026. The sector is shedding its image as a mere factory for hire and emerging as a high-stakes architectural firm for drug development.Leading this charge is Akums Drugs & Pharmaceuticals, a company that mirrors the broader Indian arc: a journey from a cost-competitive domestic manufacturer to a global, innovation-led partner.The Evolution: From Filling Orders to Designing SolutionsThe transition of Akums follows a classic industrial "climb" that parallels how global manufacturing leaders shift from generic production to value-added services. By moving from OEM (Original Equipment Manufacturer) to a strategic partner, Akums has fundamentally changed its value proposition through three distinct eras:The Scale-Up (2004–2010): Focus on high-volume oral solids (tablets and capsules) for the Indian domestic market, competing on price and manufacturing efficiency.The Quality Pivot (2011–2020): Aggressive investment in GMP-aligned facilities. The company secured approvals from the WHO, EU-GMP, and ANVISA (Brazil), satisfying Western regulatory rigors to expand beyond local borders.The "D" in CDMO (2021–Present): Shift from taking orders to offering formulation development, stability testing, and clinical trial supplies. With four DSIR-approved R&D centers and a library of over 4,200 commercialized formulations, they now function as a technical extension of global pharma brands.The New Architecture: India’s CDMO Landscape in 2026The shift from "volume" to "value" is best understood by comparing the champions of this space. While traditional titans like Divi’s dominate in chemical synthesis, the new wave of CDMOs focuses on complex research and integrated manufacturing.Akums Drugs & Pharmaceuticals: Market Cap of ~$798 million (as of Jan 27, 2026). Specialized in complex formulations with 140+ patents. Their current focus is on specialized modalities like extended-release "tablet-in-tablet" technology.Divi’s Laboratories: Market Cap of ~$19.1 billion. The undisputed leader in API (Active Pharmaceutical Ingredient) and custom synthesis, maintaining high margins through massive economies of scale.Syngene International: Market Cap of ~$3.0 billion. An integrated CRDMO (Contract Research, Development, and Manufacturing Organization), heavily invested in biologics with a significant presence in the US to service global biotech firms.Financial and Market Profile: A 2026 SnapshotAs of January 2026, Akums stands as a symbol of the sector’s maturity. Following its 2024 IPO, the company has navigated a complex global "reset" in pharma spending. (Figures converted at $1 = ₹83.5).Revenue Resilience: For H1 FY26 (ending Sept 2025), Akums reported revenue of $244.5 million. Despite a slight 1.5% YoY revenue dip in Q2 due to falling API prices, core CDMO volumes grew by 7%, outpacing the broader industry.Profitability Trends: The company reported a Net Profit of $5.1 million in Q2 FY26. While the EBITDA margin dipped to 9.3% (from 12.6% in Q1), management expects a recovery to the 12-14% range in the second half of the year as newer facilities ramp up.Global Footprint & Guaranteed Offtake: In late 2025, Akums began construction on a $45 million pharmaceutical plant in Zambia (Akums holds a 51% stake). Crucially, the Zambian government has committed to purchasing $50 million worth of medicines from Akums’ Indian facilities across 2026 and 2027 while the plant is under construction.The "EU-GMP" Crucible and AI-Led ComplianceThe European market is the primary battleground for high-margin contracts. In January 2026, Akums received EU-GMP renewal for its Plant 1 and first-time certification for its Plant 2 in Haridwar.This regulatory green light from the Bulgarian Drug Agency is the key to unlocking a landmark €200 million (~$217 million) European supply contract signed in December 2024. To service this and future Western contracts through 2027, Akums is deploying "Pharma 4.0" digital quality tools:Predictive Quality Assurance: Integrating AI with Manufacturing Execution Systems (MES) to detect anomalies in process parameters (temperature, pressure) before batch failures occur.Computer Vision for Visual Inspection: Automated AI systems that identify packaging and product defects with higher precision than human operators, meeting stringent EU standards.Digital Audit Readiness: Paperless workflows and AI-powered document management to ensure "Data Integrity" remains beyond reproach during unannounced regulatory audits.2027 Risk Assessment: The Geopolitical CrucibleWhile European expansion (EU-GMP) and African infrastructure provide a buffer, the United States remains a high-stakes geography.The "Tariff Bombshell": Proposed US tariffs under Section 232 pose a risk. However, standard generics - which account for 90% of US prescriptions -remain largely insulated to avoid domestic drug shortages and public health crises.The Biosecure Act Opportunity: The US Biosecure Act (passed into the NDAA for 2026) mandates a decoupling from Chinese biotechnology "companies of concern." This is expected to trigger a multi-billion dollar shift in contracts, with Indian CDMOs positioned as the primary "China-plus-one" beneficiaries.From Workhorse to ArchitectThe Indian CDMO sector is projected to reach $29.53 billion by the end of 2026, growing at a CAGR of 14.4%. This growth is no longer driven by "more of the same," but by high-value partnerships in biologics, peptides, and sterile injectables.Akums' journey - from a local manufacturer to a partner supplying life-saving medications to Switzerland, Germany, and Zambia - reflects the transition of Indian pharma from capacity to capability. As Western pharma faces rising R&D costs and trade friction, the Indian CDMO has become their most vital collaborator: the firm that knows how to make medicine both innovative and accessible."The renewal of EU GMP certification for Plant 1 and the new certification for Plant 2 strengthen our ability to serve regulated markets with confidence and support our long-term partnerships and sustained global growth." — Sandeep Jain, MD, Akums Drugs & Pharmaceuticals (January 23, 2026). The Economic Times.----Join SEINET - the digital platform building the European, UK and Indian corporate and startup leaders ecosystem to accelerate growth and partnerships between the markets. Become part of a trusted ecosystem of business and innovation leaders from Airbus, Microsoft, Eli Lilly and others. Request to join www.startupeuropeindia.net

India and the European Union have concluded a long-awaited Free Trade Agreement (FTA), marking one of the most significant trade pacts ever signed by either side.The deal, finalised during a high-level India-EU Summit, is expected to eliminate or reduce up to €4 billion in tariffs on EU exports and substantially boost bilateral trade flows.The agreement will reduce or phase out tariffs on 96.6% of EU exports to India, covering key sectors such as automobiles, alcohol, machinery, chemicals, pharmaceuticals, steel and iron products. At the same time, sensitive agricultural sectors on both sides including dairy, sugar, meat, rice and ethanol have been excluded to protect domestic interests.European Commission President Ursula von der Leyen, speaking alongside Indian Prime Minister Narendra Modi, described the pact as the “mother of all trade deals”, highlighting its scale and strategic importance. She called the agreement a partnership between two major global economic powers the world’s second-largest and fourth-largest economies.Prime Minister Modi hailed the deal as the beginning of a “new era” in India-EU relations, stating that it would improve access to European markets for Indian farmers, MSMEs and exporters, while also attracting greater investment into India.Major Tariff Reductions Across Key SectorsUnder the agreement:EU car tariffs in India will be gradually reduced from 110% to 10%, with an annual quota of 250,000 vehicles.Tariffs of up to 44% on machinery, 22% on chemicals, 11% on pharmaceuticals, and 22% on steel and iron will be largely eliminated over time.Wine tariffs will fall sharply from 150% to 75%, and eventually to around 20%, while olive oil tariffs will drop from 45% to zero within five years.Levies on processed food products such as bread and confectionery currently as high as 50% will be removed.In return, over 99% of Indian exports, valued at approximately $75 billion, will gain preferential access to the EU market. Key Indian sectors expected to benefit include textiles, gems and jewellery, pharmaceuticals, engineering goods and chemicals. Notably, EU duties on Indian textiles previously exceeding 10% will be reduced to zero.Boost to Trade, Investment and Strategic AlignmentThe European Union is currently India’s largest trading partner, with bilateral trade in goods and services exceeding €180 billion annually. Officials expect the new agreement to potentially double EU exports to India over time, while strengthening supply chains and regulatory cooperation.The deal also includes commitments to streamline customs procedures, improve regulatory coordination, and enhance cooperation on standards steps expected to reduce trade friction and costs for businesses on both sides.In a significant climate-related move, the EU has pledged €500 million to support India’s industrial decarbonisation efforts, addressing concerns over the bloc’s upcoming carbon border tax on products such as steel and chemicals. While European industry groups broadly welcomed the agreement, some sectors expressed caution. The EU steel industry has raised concerns over trade imbalances, while politically sensitive sectors - such as India’s dairy industry and several EU agricultural segments were deliberately excluded from the pact. The agreement will now undergo approval by the European Parliament, EU member states, and India’s Cabinet before entering into force. Once implemented, it will become one of the most comprehensive trade agreements India has signed, aligning with New Delhi’s broader push to expand trade ties covering over half of India’s global trade.read more: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_184-------Join SEINET - the digital platform connecting European, UK and Indian corporate and startup leaders to accelerate growth and partnerships between the markets. Become part of a trusted ecosystem of business and innovation leaders. Request to join www.startupeuropeindia.net