As the US threatens new import barriers, Indian drugmakers explore the potential of free trade agreements to enhance market access, but emphasise the need for regulatory strength and innovation to remain competitive.
Donald Trump’s latest tariff warning has once again unsettled India’s pharmaceutical exporters, but the bigger strategic question for the sector may lie elsewhere. As the United States president threatens fresh import barriers, Indian drugmakers are also being pushed to think harder about free trade agreements, shifting market access and whether trade diplomacy can do more than simply soften the blow. The answer, according to industry executives and analysts, is that trade deals can help, but only if companies have the quality systems, regulatory standing and manufacturing depth to make use of them.
India has signed nine free trade agreements covering 38 countries since 2021, and the timing has sharpened debate over what that means for pharma. Many exporters already operate in markets where duties are low or negligible, so the commercial value of these agreements is often less about tariff cuts and more about predictability, faster customs clearance and closer regulatory cooperation. Vivek Valsaraj, chief financial officer at Piramal Pharma, told Express Pharma that FTAs should be seen as tools that improve long-term commercial confidence rather than as simple tax-saving devices. Neeraj Bansal, partner and head of India Global at KPMG in India, argued that agreements such as the India-UAE CEPA, India-Australia ECTA and India-UK CETA are increasingly about easing the mechanics of cross-border business.
That matters because Indian pharma’s global position was built long before the current wave of trade pacts. Dr Vellaian Karuppiah, chief operating officer at Shilpa Medicare, said India’s export success came from scale, cost competitiveness, quality systems and a large base of regulator-approved facilities, not from tariff preferences. He added that the durable edge lies in regulatory compliance, manufacturing excellence and supply-chain resilience, not in lower duties alone. Anil Matai, director general of the Organisation of Pharmaceutical Producers of India, said the investment case also depends on intellectual property protection, stable regulation and the ability to commercialise innovation.
The tariff threat from Washington may still prove less damaging than it first appears. Industry commentary cited by Nation Press suggests the proposed 100% to 200% tariff regime would have limited immediate impact on Indian generic makers because the country remains highly competitive on cost and the U.S. relies heavily on imported generics. The Economic Times has reported that Indian industry groups view the main exposure as being in patented and branded medicines, not the generic products that dominate India’s exports. Even so, the broader uncertainty has reinforced the case for diversification, with some analysts warning that firms cannot rely on the U.S. alone for growth.
That is why the industry is talking increasingly about moving up the value chain. Valsaraj said the strongest opportunities are likely to be in higher-value segments such as sterile injectables, complex formulations, antibody-drug conjugates, peptide technologies and integrated contract development and manufacturing services. Karuppiah made a similar point, saying tariff concessions matter far less in plain generics than in biologics, biosimilars and other technically demanding categories where regulatory and logistical barriers are higher. Matai said India’s next leap should come from becoming a centre for innovation-led manufacturing, supported by stronger capabilities in biologics, advanced therapies and speciality medicines.
FTAs alone will not deliver that shift. Industry voices stress that India still needs deeper domestic reform, especially on API dependence, key starting material security, research incentives and talent development. Karuppiah said reliance on imported inputs remains a structural weakness, while Matai said stronger support for R&D, clinical development and advanced manufacturing will be essential if India wants to attract long-term investment. Bansal warned that easier market access will also expose companies to tougher global competition on quality, sustainability, data integrity and traceability. In other words, trade deals can open the door, but Indian pharma will still have to earn its place inside.
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