The recently signed India-UK Free Trade Agreement (FTA) is anticipated to significantly boost bilateral trade, particularly for the pharmaceutical and medical technology sectors. Industry bodies express optimism that the agreement will create new opportunities for Indian manufacturers, enhance access to advanced medical technologies, and promote collaboration in research and development.

Key Benefits for the Pharmaceutical Sector

The FTA is expected to provide a substantial boost to India's pharmaceutical exports, especially in generics and biosimilars, by offering tariff relief and streamlined regulatory pathways. The UK has committed to eliminating tariffs on nearly 99% of Indian pharmaceutical exports, formalizing a duty-free status that already existed and providing long-term clarity to exporters. This is expected to enhance the competitiveness of Indian generics in the UK market, which is India's largest pharmaceutical export destination in Europe.

Namit Joshi, Chairman of Pharmexcil, stated that the agreement strengthens supply chains, improves access to affordable medicines, and drives foreign direct investment (FDI). He also anticipates collaborations in bulk drug imports, contract manufacturing, and joint research, which will empower India's competitive edge and promote global partnerships.

The FTA is also expected to reduce drug registration timelines in the UK from 1.5-2 years to under one year, offering procedural flexibility to domestic pharmaceutical companies.

Opportunities for the Medical Device Sector

The medical device industry also stands to gain significantly from the FTA. Rajiv Nath, forum coordinator of the Association of Indian Medical Device Industry (AiMed), anticipates an increase in trade between the two countries. The agreement reduces customs duties on essential medical devices, such as consumables, implants, and diagnostic equipment, which previously faced duties of up to 7.5% in India and 4.2% in the UK. Pavan Choudary, Chairman of the Medical Technology Association of India (MTaI), noted that import duties on medical technology products will be reduced from approximately 15% to around 3%, significantly lowering costs and improving access to advanced medical technologies.

The FTA is expected to make Indian medical device companies more competitive in the UK market, particularly with the UK's shift away from reliance on Chinese imports post-Brexit and COVID-19. Himanshu Baid, Managing Director of Poly Medicure Ltd, believes the agreement will not only strengthen trade ties but also open new avenues for advanced technology collaborations between Indian and UK companies.

Concerns and Safeguards

Despite the optimism, some industry players have raised concerns about potential challenges. AiMed is seeking clarification on non-tariff measures and the streamlining of regulatory processes. They have also requested the recognition of regulatory approvals from the CDSCO or the Quality Council of India's voluntary Indian Certification for medical devices to fast-track approvals by the UK's Medicines and Healthcare products Regulatory Agency (MHRA).

There are also concerns about the possibility of other countries rerouting products into India through the UK to exploit the zero-tariff provisions under the FTA. To address this, strict monitoring of imports is being sought to prevent Chinese-origin products from being routed through the UK to take advantage of the FTA.

Overall Impact

The India-UK FTA is projected to have a transformative economic impact, potentially adding $34 billion per year to the trade volume by 2040. It aims to double bilateral trade in goods and services from $60 billion to $120 billion by 2030. The agreement includes frameworks for cooperative research and technology transfer, which are expected to create new investment channels and stimulate the development of locally adapted products.

The FTA is viewed as a significant step forward in bilateral trade relations, offering notable opportunities for India's healthcare sector, including reduced tariffs on medical devices, potential cost savings, and improved access to advanced technologies. Effective implementation will require robust regulatory oversight, consistent support for domestic industry, and vigilant enforcement to ensure patient safety and fair competition.