Pharma industry may lose Rs 2,500-5,000 crore due to West Asia crisis
The Indian pharmaceutical industry could face losses between Rs 2,500 crore and Rs 5,000 crore due to supply disruptions and rising freight costs linked to the West Asia conflict. Key export markets in the Gulf region remain heavily dependent on Indian medicines
New Delhi: The domestic pharma industry is staring at a loss ranging between Rs 2,500 crore and Rs 5,000 crore due to supply and freight movement disruptions caused by the conflict in the Middle East, according to the Pharmaceuticals Export Promotion Council of India.
Currently, GCC countries account for 5.58 per cent of the total Indian pharma exports, it noted.
“Our recent data also show an upward trajectory in the total export value of Indian pharmaceutical exports to the Middle East (WANA region) from USD 1,320.44 million in FY 2020-21 to USD 1,749.68 million in FY 2024-25,” Pharmaceuticals Export Promotion Council of India (Pharmexcil) Chairman Namit Joshi stated.
Key markets like the UAE, Saudi Arabia, Oman, Kuwait, and Yemen are highly dependent on India for affordable medicines and generic formulations, he noted.
Pharmexcil data also indicates significant growth in emerging markets such as Jordan, Kuwait and Libya, as well as product categories like vaccines, surgical products and AYUSH formulations, he stated.
The ongoing challenges in the global freight market have the potential to significantly impact Indian pharmaceutical exports, particularly in regions such as GCC countries and WANA, Joshi said.
The doubling of freight charges for both imports and exports, accompanied by surcharges of USD 4,000-USD 8,000 per shipment, has put substantial pressure on Indian pharmaceutical companies, he added.
“Given the significant importance of this market for pharmaceutical products, a complete disruption of March exports could result in a potential loss of approximately Rs 2,500 crore to Rs 5,000 crore for the Indian pharmaceutical industry,” he said.
Joshi noted that there is a need for increased collaboration with government authorities to seek possible freight relief measures, such as subsidies or logistical support for pharma exporters.
Diversification of shipping routes and exploration of alternate logistics options are required to ensure the stability of pharmaceutical supply chains, he said.
Besides, there should be continued dialogue with international regulatory bodies to ensure that pharmaceutical products remain available on time in key markets despite the logistical challenges, Joshi said.