The Pharmaceuticals Export Promotion Council of India (Pharmexcil) has recommended diversification of shipping routes and exploration of alternate logistics options in the wake of tensions in the Gulf region.
It has also recommended increased collaboration with government authorities to seek possible freight relief measures, such as subsidies or logistical support for pharma exporters, to ensure the stability of pharmaceutical supply chains.
According to Namit Joshi, chairman, Pharmexcil, “There is a need to have a continued dialogue with international regulatory bodies to ensure that pharmaceutical products maintain timely availability in key markets despite the logistical challenges. Tensions in the Gulf region are creating uncertainty in critical maritime and air cargo routes essential for pharmaceutical shipments. Key routes like the Red Sea, Strait of Hormuz, and Gulf shipping corridors are facing potential risks of rerouting or delays, which may impact delivery schedules. This is particularly concerning for temperature-sensitive pharmaceutical products that could be adversely affected by these disruptions.”
Joshi further adds that a secondary concern is the escalation of costs throughout the pharmaceutical supply chain. The major cost drivers include crude oil price fluctuations, rising logistics costs for APIs and finished formulations and shipping delays that will affect inventory cycles. 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 to Rs. 5,000 crores for the Indian pharmaceutical industry.
Currently, Gulf Cooperation Council (GCC) countries account for 5.58% of total Indian exports. Pharmexcil’s recent data also shows 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. Key markets like UAE, Saudi Arabia, Oman, Kuwait, and Yemen are highly dependent on India for affordable medicines and generic formulations. 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 formulations.
“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. The doubling of freight charges for both imports and exports, accompanied by surcharges of USD 4,000 to USD 8,000 per shipment, has put substantial pressure on Indian pharmaceutical companies,” according to Pharmexcil.
“Pharmexcil continues to closely monitor the situation and are actively engaging with stakeholders in the logistics and trade sectors to explore ways to mitigate the impact on pharmaceutical exports, especially in the GCC and WANA regions. As the pharmaceutical industry navigates through this challenging period, Pharmexcil will continue to advocate for solutions that will safeguard the interests of Indian pharmaceutical exporters, ensuring that the GCC and WANA regions remain vital markets for India’s pharmaceutical sector,” Joshi concludes.
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