He also urged the pharmaceutical industry to reduce dependence on imported raw materials and build more flexible export and import relations.Speaking on the sidelines of ‘Thinking Camp – Scaling Up Pharma Exports’ in Hyderabad, Agarwal said the government has seen an impact on both imports and exports due to the Middle East crisis in the last month, with energy imports and regional trade flows under pressure.
“The Middle East is also an important market. About 12-13 per cent of our exports go to this region. So, this will have a direct impact. And if this continues for a long time, perhaps our exports to other parts of the world will also be affected as some of the value chains will pivot back. “We are aware of it,” Aggarwal told reporters, according to news agency PTI.He said the exact impact of the conflict on India’s trade would become clear in the next few weeks, but indicated that both exports and imports could see some decline.“And I believe it will not only be one-way traffic in terms of exports, but there will be some decline in imports as well,” he said.Aggarwal cautioned that even if the war ends soon, the disruption could last for months or years, depending on the extent of the damage done to supply chains and infrastructure.“So, at this juncture, it will be very difficult to take a long-term view on this,” he said.He said the Center is trying to ensure that supply chains face minimal possible disruption, while acknowledging that some trade numbers may be soft in the near term.
Pharma sector is already feeling the supply pressure
The Commerce Secretary said the pharmaceutical sector has already seen some impact in the availability of key intermediates and solvents as the supply chain is being affected by the regional crisis.Aggarwal said all arms of the government are working to prioritize the limited LPG supply and try to ease the situation by diversifying imports and sourcing from alternative suppliers.“So, as we are able to resolve that overall supply, we will try to alleviate some of the pain in every area. Pharma sector will be one of the priority sectors,” he said.He said the government and industry are jointly working on ways to make supply chains more resilient.
Call for self-reliance in APIs, bulk drugs and intermediates
At the same event, Agarwal asked the pharmaceutical industry to use the current geopolitical uncertainty as a trigger to reduce dependence on critical imported inputs and strengthen domestic capacity.Addressing industry stakeholders in Hyderabad, he stressed the importance of “ensuring greater self-reliance by meeting 80-90 per cent (or more) of domestic pharmaceutical requirements through indigenous production, while reducing significant import dependence in APIs, bulk drugs and intermediates”.He also stressed the importance of “insulating import supply chains in a geopolitically fragmented world, where availability may be critical”.Calling for a comprehensive strategic repositioning of India as a global hub of quality, affordable pharmaceuticals, Aggarwal said quality will continue to be the decisive factor in health care. He urged the region to build a strong quality ecosystem to enhance global trust and keep pace with emerging areas such as biologics and biosimilars.He encouraged the industry to shift from a volume-driven model to a value-driven model with greater focus on innovation and new patents while maintaining India’s strength in generics.
Despite uncertainty, exports remain on a positive path
Agarwal said that despite geopolitical turmoil, India’s exports are expected to remain on a positive path in the last financial year.The broader pharmaceutical export picture remains resilient. India’s pharma exports in 2024-25 stood at $30.47 billion, an increase of 9.4 percent over the previous year.During April-February 2025-26, pharma exports reached $28.29 billion, registering a growth of over 5 per cent over the same period last year.India remains the third largest producer of pharmaceuticals globally by volume and the 14th largest by value, underscoring both the scale of the sector and the stakes involved in insulating it from external shocks.
