Indian Pharma Faces Rs 5,000 Crore Export Risk as Middle East Conflict Drives Freight Charges Up
New Delhi: The domestic pharma industry is staring at a loss ranging between Rs 2,500 crore and Rs 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.
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 formulation, he stated.
The ongoing challenges in the global freight market have the potential to significantly impact Indian pharmaceutical exports, particularly in regions like 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'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.
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.
