India-EU FTA reshapes pharma, auto and specialised logistics

The India-EU FTA could accelerate pharmaceutical exports, redraw automotive sourcing networks and increase demand for specialised logistics between both regions.

- Shefali Ranawat & Rajarshi Chatterjee

For years, India and Europe have been important trading partners, connected through the movement of medicines, engineering goods, automotive components, chemicals, machinery and technology.

The proposed India-European Union Free Trade Agreement (FTA), often described as the “mother of all deals,” is targeted for implementation by 2027 and is expected to become one of the most consequential trade agreements in India’s economic history.

Trade in goods between India and the EU has grown by 83.7% over the past decade. In 2023, the EU was India’s third-largest trading partner, with bilateral goods trade valued at €118 billion, representing 11.1% of India’s total merchandise trade. India, meanwhile, ranked as the EU's ninth-largest trading partner, accounting for 2.3% of the bloc’s total goods trade. Industry executives believe the agreement could reshape pharmaceuticals, automotive manufacturing and the logistics networks.

Pharmaceuticals expected to gain from lower trade barriers

The pharmaceutical industry is likely to be among the earliest beneficiaries. India’s pharmaceutical sector ranks third globally by volume and eleventh by value, with more than 3,000 companies and 10,500 manufacturing units, according to Government of India data released in 2025.

Yuvraj Sharma, Head of Sales and Marketing at Kuehne+Nagel India, Sri Lanka and the Maldives, said, “Once implemented, it is expected to progressively reduce tariffs and simplify customs procedures, which would support smoother cross-border trade, improve shipment predictability, and strengthen supply chain connectivity between India and Europe, including for pharmaceutical products.” Pharmaceutical exports from India grew by 9.4% to $30.47 billion in FY2024-25, reflecting sustained global demand and Europe’s continued importance as a destination market.