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Indian pharma exporters are bracing for shipment delays and higher logistics costs as escalating tensions in the Middle East disrupt key cargo routes. Rerouting of ships and aircraft, along with rising war-risk insurance premiums, has pushed up freight rates and created uncertainty for time-sensitive pharmaceutical exports. Industry players warn that prolonged instability in the region could delay supplies and squeeze margins for Indian pharma companies that depend on West Asian trade corridors.
From an Indian pharma standpoint, the Middle East pharmaceutical market was a rapidly growing sector. Saudi Arabia and the UAE were the dominant markets, focusing on localizing production, biotech, and digital health initiatives. The sector is shifting towards a strong focus on advanced, locally produced pharmaceuticals.
Now Indian pharma is tense and apprehensive over the ongoing turmoil in the Middle East contributed by its unpredictable delivery timelines with shipping disruptions and freight costs. The sector is now putting in place contingency plans even as this region particularly the Gulf Cooperation Council (GCC), was expanding its Free Trade Agreement (FTA) network to diversify opportunities.
Siddharth Daga, MD, VINS Bioproducts Limited, pointed out, “With India exporting $30.47 billion in pharmaceuticals in FY25, including $1.75 billion to the Middle East and North Africa, sustained instability and disruptions around the Strait of Hormuz highlight the need for diversified markets, secure payment channels, and resilient supply chains to protect export growth.” In February 2026, India inked Terms of Reference for a comprehensive FTA with the GCC and bilateral pacts with Oman signed in December 2025 and the UAE in 2022.
Kaushik Desai, executive committee member, industrial pharmacy section, International Pharmaceutical Federation (FIP) and a pharma consultant said that the war in the Middle East is a tremendous cause of concern to all of us. The loss of innocent lives, the damage to the economy or the Gulf Region which will lead to increase in oil prices and reduction of export of pharmaceuticals and health wellness products will affect the industry. The effect will be dual, increase in cost of living due to increase in oil and crude prices and loss of business due to restricted movement of freight and products to the war affected region.
The current situation calls for a cautious wait-and-watch approach, as its impact will largely depend on the crisis's duration. A likely outcome is a rise in fuel costs, which will affect various industries, including pharma. This might lead to surplus inventory build-up and financial losses due to delayed shipments or rerouting. Exports to West Asia, valued at $911 million last year, may also be impacted. The API manufacturing sector, reliant on petroleum-based inputs, will face increased costs, triggering a ripple effect on both domestic and global markets, added Desai.
Jatish N Sheth, president, Karnataka Drugs and Pharmaceuticals Association (KDPMA) and director Srushti Pharma said that the war in the Middle East is a tremendous cause of concern to all of us. The loss of innocent lives, the damage to the economy or the Gulf Region which will lead to increase in oil prices and reduction of export of pharmaceuticals and health wellness products will affect the industry. The effect will be dual, increase in cost of living due to increase in oil and crude prices and loss of business due to restricted movement of freight and products to the war affected region.
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