Pharma exports to the Gulf Cooperation Council (GCC) countries like UAE, Saudi Arabia and West Asia-North Africa (WANA) region have been badly affected due to the US-Israel-Iran conflict. Both regions account for about 5% to 6% of India’s total pharma exports, according to experts.
Key markets like UAE, Saudi Arabia, Oman, Kuwait, and Yemen are highly dependent on India for affordable medicines and generic formulations. The ongoing challenges in the global freight market has also significantly impacted Indian pharmaceutical exports, particularly in regions like GCC countries and WANA region.
“A complete halt in shipments for March 2026 alone could result in losses of Rs. 2,500 to Rs. 5,000 crore (USD 300 to USD 500 million), particularly for markets like Yemen, Oman, Kuwait, and Jordan that rely on affordable Indian drugs. Dubai and Jebel Ali ports, key transit points for exports to Africa, Europe, and the US, are seeing delays and refusals of cargo,” informs pharma industry specialist Vikas Nim.
The conflict, which escalated on February 28, 2026, with US and Israeli strikes on Iran, has led to heightened tensions in the Middle East, disruptions in key shipping routes like the Strait of Hormuz, and spikes in global energy and logistics costs. The conflict has significantly impacted global pharma trade due to dependencies on Middle Eastern transit hubs, energy imports, and supply chains.
“Shipping lines have imposed surcharges of USD 3,500 to USD 8,000 per container, with overall freight rates doubling (e.g., from USD 1,200 to USD 2,400 for bulk drugs from China). This could increase logistics costs by 30% to 50%, leading to higher production expenses, inventory shortages, and potential price hikes for essential medicines. Air freight costs have also spiked, impacting time-sensitive pharma shipments,” Nim further informs.
Experts say that India imports raw materials and intermediates for pharma production, and disruptions could stress manufacturing, especially if routes through the Middle East are blocked. India imports much of its oil from the region. Rising crude oil prices add to operational costs for hospitals and pharma firms, potentially causing temporary drug price volatility.
“The conflict will exacerbate inflation and downward pressure on growth in energy-import-dependent economies like India, affecting equity markets and industrial activity. Pharma hubs like Bengaluru, a major export centre, could see amplified effects from these global disruptions. If Israeli pharma giants like Teva face supply interruptions, Indian firms might capture more market share in the US and Europe. Overall, while short-term disruptions are acute, the industry may adapt through alternative routes or suppliers, but prolonged conflict could deepen the economic strain,” Experts explain.
UAE has the largest market in the GCC region, holding a 22.58% share as of the April-January FY 2025-26 period. While total exports saw a dip between FY 2023-24 (USD 460.62 million) and FY 2024-25 (USD 378.43 million), the most recent period shows a modest recovery with 1.72% growth.
Saudi Arabia market in the GCC region has shown strong growth, doubling from USD 103.52 million in FY 2020-21 to USD 211.37 million in FY 2024-25. However, the most recent April-January FY 2025-26 data shows a 9.81% decline, primarily driven by a 17.16% drop in drugs, formulations and biologicals.
Egypt in WANA region is a major hub for bulk drugs and drug intermediates, which accounted for USD 155.37 million of its USD 212.82 million total in FY 2024-25. Notably, while the overall market saw a slight recent dip of 0.77%, the drugs, formulations and biologicals category in Egypt grew by 32.94% in the most recent period. |