Chennai: For All FTA Talks, There Should Be A Model Pharma Chapter: Niti Aayog

Several existing FTAs contain pharmaceutical-related provisions, but the benefits on the ground are mixed because many provisions remain cooperative in nature. The recently concluded India-EU FTA has incorporated pharmaceutical-specific regulatory cooperation clauses, which is a step in the right direction, but it needs to be widely included across the several FTAs that India is in the process of ratifying.

“Develop a model pharmaceutical chapter for future FTAs that may serve as a blueprint for bilateral and multilateral trade negotiations. The chapter should incorporate provisions on regulatory reliance, intellectual property cooperation, GMP inspection, product registration, standards harmonisation, and transparent dispute-resolution mechanisms to reduce compliance costs and enhance regulatory predictability across key export markets,” Niti Aayog said in a report.

A model chapter would help ensure greater consistency in negotiations, strengthen market access outcomes, and systematically address non-tariff barriers affecting pharmaceutical trade.

India’s pharmaceutical exports remain concentrated in volume-based generic formulations and retail medicaments, while participation in high-growth segments such as biologics, biosimilars, vaccines, advanced therapies, hormones, and analogues remains limited. These biomanufacturing facilities require high capital expenditure which often acts as a challenge for companies to invest in the long term.

The Mission Biopharma SHAKTI scheme, launched in 2026-27, marks an important step in promoting biologics and biosimilars manufacturing. However, a comprehensive long-term policy framework would be necessary to support sustained investment, technology development, and scale-up in these high-value pharmaceutical segments.

Investing in the research and development for pharmaceuticals is high-risk and requires long gestation periods, making it a risky decision. Globally, pharmaceuticals rank as the second-largest R&D-investing industry. On average, it takes 10–15 years to formulate a drug. Indian pharma companies invest approximately 7 per cent of net sales in R&D, compared to the 15–20 per cent spent by global companies. There is a need for long-term incentives and funding mechanisms to develop new products and technologies.