India should seek reciprocity in free trade agreement talks with EU: GTRI

Calling on India to achieve a fair deal in its negotiations with the European Union (EU) in the proposed free trade agreement (FTA), economic think tank GTRI on Sunday urged officials to seek reciprocity and improved market access for India’s medical devices sector in these markets.

 

“While the EU demands zero tariffs on medical devices from India, it maintains high regulatory barriers that make Indian exports difficult in EU markets,” GTRI founder Ajay Srivastava said.

 

India currently applies tariffs ranging from zero to 10 per cent on most medical devices.

 

However, the think tank added that reducing tariffs on these devices without addressing the EU's regulatory challenges would lead to low export growth and an increase in imports from the EU.

 

"For a fair trade deal, India must demand reciprocity. It should only reduce tariffs on medical devices if the EU lowers its non-tariff barriers," GTRI added.

 

Srivastava added that although the EU has zero customs duties, the market entry costs are substantial due to stringent regulations.

 

“Exporting to the EU has become increasingly difficult after the EU replaced the Medical Device Directives (EU-MDD) with the more stringent Medical Device Rules (EU-MDR),” he said.

 

Srivastava highlighted that the certification approval process has been extended from four to eight months to two to three years, with a shortage of notified bodies and auditors in the EU leading to high certification costs.

 

As a result, many Indian exporters are pulling back from or limiting their presence in the EU market, as the financial burden of market participation becomes unsustainable.

 

In 2024, India’s global medical device exports were valued at $2.3 billion, while imports stood at $4.7 billion, of which the EU market accounted for $580 million in exports and $1.15 billion in imports.

 

Srivastava also pointed out that the lack of Indian participation in the Medical Device Single Audit Program (MDSAP), which allows for a single audit to meet regulatory requirements across multiple markets, is restricting the acceptance of Indian devices in key regulated markets.

 

“To facilitate exports to the EU and other major markets, India needs to pursue reforms, such as negotiating Mutual Recognition Agreements (MRAs) with the EU, the US, and other regulated markets based on ISO-harmonised standards,” he added.