Drugmakers may review shipment schedules to West Asia if conflict drags on

Indian drugmakers are reviewing shipment schedules and inventories for West Asia as escalating tensions threaten sea and air routes, raising freight costs and risking supply delays

Pharmaceutical companies may closely review shipment schedules and inventory positioning for West Asian countries to ensure annual targets remain on track in light of recent clashes, according to industry executives.

 

“India’s pharmaceutical exports are structurally resilient, but any geopolitical disruption in key transit corridors, particularly in West Asia, inevitably creates near-term logistical challenges,” said Bhanu Prakash Kalmath S J, partner and healthcare industry leader at Grant Thornton Bharat. 

India exported pharmaceutical products worth $1.75 billion to the West Asia and North Africa (WANA) region, which accounted for approximately 5.7 per cent of India’s total pharmaceutical exports worth $30.38 billion in the financial year 2024-25 (FY25). 

Major export destinations for India in FY25 were the UAE at $378.54 million, Egypt ($212.84 million), Saudi Arabia ($211.73 million), and Iraq ($228.41 million). 

India’s drug exports to the region primarily consist of high-quality, cost-effective finished dosage forms (FDFs) such as tablets, capsules, and syrups, along with generic drugs and biosimilars.

 

Experts added that any geopolitical disruption in key transit corridors may also hit margins due to reliance on bulk shipments for cost efficiency. Pressure on routes, they added, can lead to longer transit times, rerouting, and higher freight costs. The sector largely relies on air and sea freight for bulk shipments due to cost efficiency, and any pressure on these routes could lead to these problems.

 

“At a broader level, escalation of the conflict in the region is likely to disrupt shipment flows across both sea and air routes, adding pressure to supply chains and logistics economics,” Bhanu Prakash said.

 

However, he added that how these incremental costs are absorbed is a nuanced issue that may vary based on contractual structures and the expected duration of the disruption.

 

Another pharma executive said that while the industry does not see any immediate impact on pharmaceutical exports, they will have to see the extent to which the conflict could stretch and affect supply continuity.

 

“In many instances, the impact could be shared across the value chain, particularly if it is viewed as temporary rather than structural. The immediate focus will be on maintaining supply continuity while managing cost pressures in a calibrated and commercially balanced manner,” he added.