India Pharma Outlook Team | Wednesday, 24 June 2026
Future FTAs in the Indian pharma industry may look different as India pushes for a stronger pharmaceutical agenda in its trade negotiations.
A new report by NITI Aayog has proposed a dedicated Pharma FTA chapter in future free trade agreements, a move aimed at improving market access for Indian drugmakers and helping the country move up the pharma value chain.
The proposal comes at a time when India's pharmaceutical sector is seeking faster growth in global markets.
While the country is one of the world's largest suppliers of generic medicines, policymakers believe future growth will depend on higher-value products, innovation, and easier access to overseas markets. The proposed Pharma FTA framework is expected to address these priorities while strengthening India's position in global healthcare supply chains.
According to the report, traditional trade barriers such as tariffs are becoming less significant for pharmaceutical companies. Instead, non-tariff barriers have emerged as major challenges for Indian exporters.
These barriers include:
NITI Aayog believes that including a dedicated pharmaceutical chapter in future trade agreements could help address these issues through regulatory cooperation and streamlined approval processes.
The recommendation reflects a broader shift in trade policy, where countries increasingly use FTAs to address regulatory and market-access concerns rather than focusing only on tariff reductions.
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The report also highlights the need for India to strengthen its presence in high-value pharmaceutical segments.
While the Indian pharma industry has earned global recognition for affordable generic medicines, NITI Aayog says the next phase of growth should focus on:
The think tank noted that India performs strongly in manufacturing volumes but needs to improve its share in premium and innovation-led products. Expanding research and development capabilities and encouraging pharmaceutical innovation will be critical to achieving this goal.
The report also calls for stronger collaboration between academic institutions, research organizations, startups, and pharmaceutical companies. Better technology transfer and commercialization of research could help accelerate innovation across the sector.
Another major issue highlighted in the report is India's dependence on China for pharmaceutical raw materials.
A significant share of the country's API imports and other critical pharmaceutical inputs continue to come from China. This reliance creates potential supply chain risks and exposes the sector to external disruptions.
To reduce China dependence, the report recommends strengthening domestic manufacturing capabilities and building a more resilient pharmaceutical supply chain. Greater investment in local production of active pharmaceutical ingredients could support both export competitiveness and long-term supply security.
The proposal signals a new direction for India's pharmaceutical and trade strategy. As global competition intensifies, policymakers are looking beyond manufacturing scale and focusing on innovation, regulatory access, and supply-chain resilience. If implemented, the recommendations could help India strengthen its role in the global drug market while creating new opportunities for growth across the pharmaceutical sector.
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