Beyond Manufacturing: What the EU-India FTA Means for Indian CDMOs in Europe

By Harry Kennedy, Talent Partner, Vector Talent

Most of my conversations with CDMO leaders this year land on the same question: what does Europe actually look like for us now? Since the EU and India concluded their free trade agreement in January, that question has only got louder.

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What the EU-India FTA changes for pharmaceuticals

The two sides concluded negotiations on 27 January 2026, twenty years after they first sat down. It's the largest deal either has signed, cutting tariffs across the great majority of goods traded between them and creating a combined market of two billion consumers. For pharmaceuticals specifically, the roughly 11% tariff India applies to EU-manufactured medicines is set to be eliminated over a staging period of five to seven years.

That detail matters most to European exporters, if I'm honest. What matters more to the CDMOs and pharma companies I work with is what the deal signals about the relationship itself. Trade between the EU and India already runs past €180 billion a year, and the European Commission expects its own exports to India to roughly double by 2032. India's health minister has been just as direct about the opportunity running the other way, describing the deal as opening access to a European pharma and medtech market worth $572 billion.

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The tariff cut is still years away

It's worth being clear about the timetable, because a few people I've spoken to assume this is already live. Concluding negotiations is the first step. The text still has to go through legal revision and translation, then formal signature, then consent from the European Parliament and ratification on both sides. Ursula von der Leyen has said the two sides are on track to sign by the end of 2026, with entry into force expected in 2027 and the tariff reductions phasing in over several years after that.

For anyone building a European strategy, that gap is the useful part. The commercial advantage won't arrive on the day the tariff drops. It goes to whoever spends the intervening two or three years registering dossiers, getting sites approved and becoming a name that European buyers already recognise.

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Why 2026 is a reset year for India's CDMO sector

The FTA isn't the only signal I'd point to. The Biobeat 2026 report, published by research firm De Facto in October 2025, called 2026 a reset year for India's CDMO sector, with growth expected to slow slightly while China and the US look stronger over the medium term.

The report's author, Brian Scanlan, expects Indian CDMOs to hold their pricing advantage over Western competitors, who are dealing with their own pressure from drug pricing reform. His argument is that pricing alone won't decide the next phase. The CDMOs he sees as best positioned are the ones differentiating through technology, equipment and analytical expertise, particularly in RNAi, ADCs, PROTACs and multi-specific antibodies, with smaller firms finding room through niche specialisation. That matches almost every client conversation I have. Cost gets you on the list. Capability and regulatory depth get you the contract.

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Akums shows what commitment to Europe looks like

Akums Group, India's largest CDMO, illustrates the shift well. The company signed a €200 million agreement in December 2024 to manufacture oral liquid formulations for the European market, with commercial supply running from 2027 to 2032. Akums has also moved to incorporate its own subsidiaries in the UK and Malta, specifically so it can register dossiers in its own name and manage export business directly rather than through a third party.

Signing a supply contract is one thing. Setting up a legal entity to deal with European regulators yourself is a different kind of commitment, and a clearer signal of where a company sees its future.

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EU GMP certification doesn't put you in the room

None of these announcements mention the part I care about most. Securing EU GMP certification and signing a European supply contract gets a facility into the market. It doesn't put anyone in the room with the European buyers, regulators and partners who decide whether that facility wins the next contract, or the one after that. Manufacturing capability and commercial presence are separate problems, and outside of moves like Akums's, most of the investment on the Indian side is still going into the first one.

A tariff cut makes European supply cheaper. It doesn't build the relationships that turn a first contract into a standing one, or move a CDMO's conversations from commodity generics into biologics and ADCs.

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The hires that turn capacity into contracts

When Indian CDMOs ask me what a European presence actually requires in headcount terms, the answer usually starts with three or four roles rather than an office.

Regulatory affairs. Specialists who've run EMA procedures and EU dossier submissions from the inside, and who can anticipate what a national competent authority will query before it's raised. This is the hire that shortens approval timelines more than any other.

Quality leadership. Qualified Persons and QA leads who can hold an EU GMP position under inspection, and who European customers will accept as the counterpart in an audit.

Business development. Commercial hires who can sit across the table from a European biotech or mid-cap pharma and speak their language directly, without a distributor in between. Most of the searches I run in this space are for someone who's sold outsourced services into Europe before and arrives with the relationships already built.

Project and account management. The people who hold the customer relationship between contract and delivery, which is where standing relationships are won or lost.

For CDMOs that have spent the last two years investing in facilities and certifications, this is the natural next investment: the people who turn that capacity into standing relationships, in a market that's now, for the first time in twenty years, actively trying to make room for them.

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Meeting Indian CDMOs at CPHI Milan 2026

I'll be at CPHI Milan from 6 to 8 October, alongside Neil Kelly and Jack Shute, talking to CDMOs and pharma companies working through exactly this shift.

Building out that side of the business, from a first BD hire through to a full regulatory and commercial team, is what I spend most of my time on. If you're thinking through what that looks like for your organisation, I'd rather start that conversation now than trade business cards on the exhibition floor in October.