The Middle East tension is impacting India beyond crude and energy supply. Indian pharma industry is also feeling the heat. The industry is staring at a loss ranging between Rs 2,500- 5,000 crore due to the various supply and freight movement disruptions owing to the conflict in the Middle East, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil).
Freight charges for both imports and exports have increased because of the Middle East conflict. Pharmexcil Chairman Namit Joshi highlighted that the ongoing challenges in the global freight market have the potential to significantly impact Indian pharmaceutical exports, particularly in regions like GCC countries and Middle East.
Doubled freight costs puts pressure on Indian pharma exports: Pharmexcil
The doubling of freight charges for both imports and exports, accompanied by surcharges of $4,000-8,000 per shipment has put substantial pressure on Indian pharmaceutical companies, Joshi said.
India’s pharma exports to Middle East rise to $1.74 billion in FY25
According to a PTI report citing Pharmexcil, six members Gulf Cooperation Council (GCC) account for 5.58% 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 $1,320.44 million in FY21 to $1,749.68 million in FY25,” 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 formulation, he stated.
Export disruption in March could cause up to Rs 5,000 crore loss: Pharmexcil
“Given the significant importance of this market for pharmaceutical products, a complete disruption of March’s 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 according to PTI.
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 maintain timely availability in key markets despite the logistical challenges, Joshi said.