Kamal Ghorui
Hyderabad: India’s pharmaceutical sector is staring at potential losses of Rs 2,500– Rs 5,000 crore if March exports to the Gulf Cooperation Council (GCC) and the wider West Asia and North Africa (WANA) are completely disrupted by the ongoing West Asia conflict, which is intensifying pressure on freight, shipping routes, and delivery schedules, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil). GCC countries currently account for 5.58% of India’s total exports, with pharma a growing component of that trade. As per recent industry data, Indian pharmaceutical exports to the WANA region rose from $1,320.44 million in FY 2020-21 to $1,749.68 million in FY 2024-25. Countries such as the UAE, Saudi Arabia, Oman, Kuwait, and Yemen rely heavily on India for cost-effective medicines, even as momentum grew in emerging markets such as Jordan, Kuwait, and Libya, with increasing demand for vaccines, surgical products, and AYUSH formulations. However, this growth is now at risk due to ongoing challenges in the global freight market. Pharmexcil Chairman Namit Joshi said tensions in West Asia affected critical maritime and air cargo corridors. Key routes such as the Red Sea, Strait of Hormuz, and Gulf shipping corridors are facing heightened risks of rerouting or delays, threatening delivery schedules. This is a concern, especially for temperature-sensitive products that can be damaged by prolonged transit or cold-chain disruptions. According to Pharmexcil, the conflict already put considerable strain on the global freight market, with freight charges for both imports and exports doubling in some cases. “The doubling of freight charges for both imports and exports, accompanied by surcharges of $4,000–$8,000 per shipment, put substantial pressure on Indian pharmaceutical companies,” Joshi said. Another concern is escalating costs across the pharmaceutical supply chain, with major cost drivers including crude oil price fluctuations, rising logistics costs for APIs and finished formulations, and shipping delays that will affect inventory cycles, he said. Pharmexcil said it is monitoring developments and engaging logistics and trade stakeholders for damage control. It recommended closer coordination with govt authorities for possible freight relief measures, diversification of shipping routes and alternative logistics options, and continued dialogue with international regulators to maintain timely availability of medicines in key markets.
