Supply chain disruptions and escalating freight charges are likely to impact India's pharmaceutical exports to the Middle East and a complete disruption could cause losses worth ₹2500 crore to ₹5000 crore, says Pharmaceutical Export Promotion Council of India (Pharmexcil).

''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'', said Namit Joshi, Chairman of Pharmexcil. The doubling of freight charges for both imports and exports, accompanied by surcharges of $4,000–$8,000 per shipment, has put substantial pressure on Indian pharmaceutical companies, he said.

Currently, GCC countries account for 5.58% of total Indian exports. Pharmexcil data shows an upward trajectory in the total export value of Indian pharmaceutical exports to the Middle East (WANA region) from $1,320.44 million in FY20-21 to $1,749.68 million in FY24-25.

Key markets like UAE, Saudi Arabia, Oman, Kuwait, and Yemen are highly dependent on India for affordable medicines and generic formulations. Data also shows significant growth in emerging markets such as Jordan, Kuwait and Libya, as well as product categories like vaccines, surgical products and AYUSH formulations.

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 ₹2,500 to ₹5,000 crores for the Indian pharmaceutical industry.

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, said Namit Joshi.

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. 

Pharmexcil suggests increased collaboration with government authorities to seek possible freight relief measures, such as subsidies or logistical support for pharma exporters, diversification of shipping routes and exploration of alternate logistics options to ensure the stability of pharmaceutical supply chains and continued dialogue with international regulatory bodies to ensure that pharmaceutical products maintain timely availability in key markets despite the logistical challenges.

 United Arab Emirates (UAE) is the largest market in the 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 ($460.62 million) and FY 2024-25 ($378.43 million), the most recent period shows a modest recovery with 1.72% growth.

Saudi Arabia market has shown strong historical growth, doubling from $103.52 million in FY20-21 to $211.37 million in FY24-25.  Egypt is a major hub for Bulk Drugs & Drug Intermediates, which accounted for $155.37 million of its $212.82 million total in FY24-25. Iraq has emerged as a major destination for vaccines, with export values rising from $12.44 million in FY 2020-21 to $42.52 million in FY24-25.

Similarly, vaccine exports to Syria saw jump from $2.89 million to $9.28 million between FY23-24 and FY24-25. Ayush and Herbal exports to the UAE grew from $25.04 million to $32.98 million in the last full fiscal year, said the export promotion council.