Pharma exports fall to five-year low in March amid West Asia crisis

New Delhi: India's pharmaceutical exports slumped by 23.17% in March, the sharpest monthly fall in at least five years, as the West Asia war choked shipping routes, shut key air transit hubs and drove up freight costs. The disruption could cost ₹2,500-₹5,000 crore, industry experts said. The dip came after an impressive growth in the first 11 months of FY26 when India's pharmaceutical exports rose 5.6% year-on-year to $28.29 billion.

"Generic drugs were flowing without interruption to the US, Europe and Africa. The industry was on course to close FY26 as one of its strongest years on record. Then in March, the war disrupted the flow," said Dinesh Dua, former chairman at Pharmexcil, the industry's exports promotion council. Overall, pharma exports grew 2.13% in FY26, he added.

The war's impact is beyond supplies to West Asia.

A significant share of India's pharma exports to Europe, North America, and Africa moves through the Gulf. Dubai, Abu Dhabi, and Doha are the cold-chain transit points for India's most time-sensitive exports such as refrigerated biologics, oncology drugs, and vaccines that cannot tolerate temperature breaks or unexpected delays.

When the conflict intensified in the month of March, freight lines serving the Red Sea, Strait of Hormuz, and Gulf corridors began imposing surcharges of $3,500 to $8,000 per shipment or refused Gulf cargo altogether, industry executives said.

"Container costs for active pharmaceutical ingredients sourced from China, the chemical building blocks of paracetamol, penicillin, and metformin, doubled overnight from $1,200 to $2,400 per unit," said an executive who requested not to be identified.

The air routes were no better, he added. "Missile activity forced temporary shutdowns at Dubai, Abu Dhabi, and Doha airports, compelling Indian exporters to reroute cold-chain shipments overland through Jeddah and Riyadh. Every additional hour in transit was a gamble that no logistics plan had budgeted for," the executive said.

Preliminary industry assessments put the March hit on pharma exports somewhere between $300 million and $500 million, another executive said.