Hyderabad: India’s pharmaceutical sector is facing a potential loss of Rs 2,500-5,000 crore if exports to the Gulf Cooperation Council (GCC) and the wider West Asia and North Africa (WANA) are completely disrupted by the West Asia conflict in March, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil), putting pressure on freight movement, shipping routes and delivery schedules. GCC countries currently account for 5.58% of India’s total exports, with pharma being a growing component of that trade. According to recent industry data, Indian pharmaceutical exports to the WANA region are expected to grow from $1,320.44 million in FY 2020-21 to $1,749.68 million in FY 2024-25. Countries like UAE, Saudi Arabia, Oman, Kuwait and Yemen are heavily dependent on India for cost-effective medicines, even as emerging markets like Jordan, Kuwait and Libya have gained momentum with rising demand for vaccines, surgical products and AYUSH formulations. However, this growth is now at risk due to ongoing challenges in global goods markets. Pharmaxil Chairman Namit Joshi said tensions in West Asia have affected vital sea and air cargo corridors. Key routes such as the Red Sea, the Strait of Hormuz and the Gulf shipping corridors face increased risk of diversion or delays, threatening delivery schedules. This is a concern, especially for temperature-sensitive products that can be damaged by long transit times or cold-chain disruptions. According to Farmexil, the conflict has already put considerable pressure on the global freight market, in some cases doubling freight charges for both imports and exports. “The doubling of freight charges for both imports and exports as well as surcharges of $4,000-$8,000 per shipment have put a lot of pressure on Indian pharmaceutical companies,” Joshi said. Another concern, he said, is rising costs in 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 impact inventory cycles. Pharmexil said it is monitoring the development and involving logistics and trade stakeholders for damage control. It recommended close coordination with government 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.
