India Pharma Outlook Team | Friday, 06 March 2026
Pharmaceuticals Export Promotion Council of India (Pharmexcil) has warned that the ongoing conflict in West Asia could disrupt Indian pharma exports worth Rs 2,500–Rs 5,000 crore if the situation continues through March, raising concerns across the country’s drug manufacturing and logistics ecosystem.
The warning comes as shipping disruptions, rising freight costs, and airspace restrictions begin to affect the movement of medicines and pharmaceutical raw materials across key trade routes.
India is one of the world’s largest medicine suppliers and exports pharmaceuticals to more than 200 countries. However, the latest geopolitical tensions are now threatening Indian pharma exports, particularly shipments to the Gulf Cooperation Council (GCC) region and nearby markets that rely heavily on Indian drugs.
According to industry estimates, shipments valued at USD 300–USD 500 million (about Rs 2,500–Rs 5,000 crore) could face disruptions as cargo operators avoid risky routes and logistics costs climb sharply. Shipping companies have reportedly become cautious about carrying goods to Gulf hubs due to security concerns in the region.
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The conflict has also triggered a broader supply chain shock. A key flashpoint is the Strait of Hormuz, a critical maritime corridor that handles a major share of global shipping. Escalating tensions since late February have significantly reduced vessel traffic, forcing many shipping companies to suspend operations or reroute vessels.
Nikkhil K. Masurkar, CEO, Entod Pharmaceuticals said, “Although there could be short-term disruptions in the supply chain, we don’t foresee any significant long-term impact on pharmaceutical trade. In fact, during conflicts the demand for essential medicines often increases, and countries like India play a crucial role in ensuring supply continuity to affected regions.”
This disruption is affecting pharmaceutical trade in two ways. First, it is slowing the export of finished medicines from India to West Asia. Second, it is delaying the import of pharmaceutical raw materials and bulk drugs from China that Indian companies rely on for manufacturing. Industry executives say the situation has already pushed freight costs sharply higher and extended delivery timelines.
Freight costs for bulk drug shipments from China to India have nearly doubled, rising from about USD 1,200 to roughly USD 2,400 per container. In some cases, shipping lines are also charging additional war-risk surcharges ranging between USD 3,500 and USD 5,000, further raising costs for exporters.
Industry leaders say the Gulf region is particularly important because it acts not only as a direct market but also as a transit hub for shipments heading to Western markets, including the United States and Europe. Any disruption in that corridor could ripple through the entire pharmaceutical supply chain.
Pharmexcil chairman Namit Joshi highlighted the importance of the region in recent years, noting that exports to the Middle East have steadily grown. “Given the significant importance of this market for pharmaceutical products, a complete disruption of March 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.
Companies are now trying to manage the situation by increasing inventory levels and adjusting logistics strategies. Many pharmaceutical firms have started maintaining larger buffer stocks to prevent supply shortages if shipping delays continue.
Despite the disruption risk, analysts say the sector may remain resilient in the long term because of its global reach and diversified markets. Still, if the conflict intensifies or shipping restrictions continue for a longer period, the impact on Indian pharma exports could widen beyond West Asia and affect global medicine supply chains.
Key Data and Industry Statistics
As tensions in West Asia continue, industry leaders and exporters are closely watching shipping routes and logistics costs, knowing that prolonged instability could reshape trade flows in the global pharmaceutical market.
