The escalating US-Israel-Iran conflict that began on February 28, 2026 is causing immediate and severe impacts on pharmaceutical supply chains globally, according to experts.
They further caution that Dubai, which serves as a critical global pharma logistics hub especially for air cargo transshipments and cold-chain handling, has also been badly hit. Indian pharma exports (a major sector from hubs like Bengaluru) frequently route through Dubai International Airport (DXB) and Jebel Ali for Gulf Cooperation Council (GCC), Africa, Europe, and beyond.
Iran's retaliatory missile and drone strike on United Arab Emirates (UAE) targets, including Dubai and Abu Dhabi, have damaged key infrastructure. This has prompted the UAE to close its airspace, suspend all operations at DXB and Al Maktoum (DWC), and halt activities at Jebel Ali Port (operated by DP World). Major carriers like Emirates SkyCargo, Etihad, and others have also suspended flights, with widespread Gulf airspace restrictions.
This is one of the most severe logistics shocks to hit Dubai since Covid. The pharma sector, already sensitive to disruptions, is particularly vulnerable due to its reliance on speed and controlled conditions.
While talking about the key impacts on pharma logistics, Vikas Nim, pharma industry specialist says that it has caused air freight paralysis, which is a primary channel for pharma. Pharma relies heavily on-air cargo for high-value, time-sensitive, and temperature-controlled shipments (e.g., APIs, vaccines, biologics, injectables). DXB, one of the world's busiest international cargo hubs, is fully suspended, with damage reported to Terminal 3. Emirates SkyCargo and other carriers have halted bookings and operations. This has grounded pharma shipments, creating immediate backlogs. Rerouting via alternative hubs (e.g., Istanbul, Frankfurt, or Doha if partially open) adds 2 to 5 plus days, higher costs, and capacity shortages. Spot rates for time-sensitive pharmaceutical shipments are surging due to tight global air cargo capacity.
He further adds that the ongoing conflict has led to sea freight and port shutdown. Jebel Ali Port, which is a major gateway for containerized and bulk pharma, has suspended operations. Major shipping lines like MSC, Maersk and Hapag-Lloyd have halted Middle East bookings and are avoiding the Strait of Hormuz due to security risks. This affects bulk APIs, generics, and non-urgent shipments. Rerouting via the Cape of Good Hope adds 10 to 15 days, increasing freight costs and risking temperature excursions in cold-chain logistics.
The disruptions have also escalated into cold-chain and product integrity risks. The delays in cold chain logistics heighten the chance of spoilage for sensitive drugs (insulin, vaccines, monoclonal antibodies). Pharma companies may face regulatory issues (e.g., temperature deviation reports) and forced use of expensive emergency airlifts or local stock drawdowns.
Due to cost escalation, war-risk insurance premiums have spiked, along with fuel surcharges and rerouting fees. Overall logistics costs for affected routes could rise 30 to 50% or more in the short term.
While talking about India specific impacts, industry experts have alerted that Indian pharma exporters including major players with strong Middle East presence may face material disruptions. Dubai is a key transit hub for exports to the GCC and Africa. Delays could lead to inventory shortages in destination markets, production slowdowns if imports (e.g., intermediates) are stuck, and higher costs passed on downstream. Broader Indian exports via UAE are similarly hit, but pharma's urgency amplifies the issue.
UAE and neighboring markets could see medicine stock outs if the crisis prolongs. Global chains using Dubai as a transshipment point (India to Dubai to Africa/Europe) are disrupted. This will lead to significant backlogs. Once airspace or ports reopen, clearing delays could take weeks, similar to past crises like the Covid pandemic or Red Sea disruptions.
“With no immediate resolution in sight, pharma companies are activating contingency plans like alternative routing (e.g., direct India-Europe flights or Saudi/Oman ports if available), increased local warehousing, or air-sea hybrids. Some firms are accelerating nearshoring or dual-sourcing. For Indian pharma firms, there is a need to monitor updates from Emirates SkyCargo, DP World, and Indian authorities like the Directorate General of Foreign Trade (DGFT) and the Pharmaceuticals Export Promotion Council of India (Pharmexcil),” according to experts. |