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News|Articles|March 6, 2026

Freight Surges and Maritime Disruptions Put Indian Pharma Exports at Risk

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Key Takeaways

  • West Asia–North Africa represented $1.75 billion of India’s FY25 pharma exports, dominated by finished dosage forms plus biosimilars and vaccines, with the UAE, Iraq, Egypt, and Saudi Arabia leading.
  • Maritime carriers’ booking suspensions and Cape of Good Hope diversions are elongating lead times and pressurizing Suez-linked lanes, disproportionately impacting time-sensitive pharmaceutical replenishment cycles.
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Rising geopolitical tensions in West Asia could threaten up to $600 million in Indian pharmaceutical exports.

Escalating geopolitical tensions in West Asia and the Persian Gulf are forcing Indian pharmaceutical manufacturers to urgently re-evaluate shipment schedules and inventory positioning as logistics disruptions threaten to stall high-value trade corridors. Industry experts and trade bodies warn that the combination of rising freight costs, maritime diversions, and airspace closures could jeopardize up to ₹5,000 crore (approximately $600 million) in Indian pharmaceutical exports in the region if tensions persist.1

What are the Economic Stakes and Regional Export Trends?

The West Asia and North Africa (WANA) region has emerged as a critical market for generic drug manufacturers, particularly those based in India. In the 2024-25 financial year (FY25), India exported $1.75 billion worth of pharmaceutical products to the region, representing approximately 5.7% of its total $30.38 billion global pharma exports.2 Major destinations include the United Arab Emirates (UAE) at $378.54 million, Iraq at $228.41 million, Egypt at $212.84 million, and Saudi Arabia at $211.73 million.2

These exports primarily consist of high-quality, cost-effective finished dosage forms, including tablets, capsules, syrups, biosimilars, and vaccines.2 The Pharmaceuticals Export Promotion Council of India (Pharmexcil) has issued a stark warning regarding the immediate financial impact of the current crisis. Namit Joshi, Chairman of Pharmexcil, stated, “Given the 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 crore for the Indian pharmaceutical industry,” or approximately $300 million to $600 million.1

What are the Logistical Hurdles and Freight Surges?

The conflict has triggered immediate disruptions across maritime and air routes. Major maritime carriers have suspended bookings for sailings into the Persian Gulf, and vessels are increasingly being diverted around the Cape of Good Hope. This rerouting adds significant pressure to the Suez Canal and extends transit times, which is particularly detrimental to time-critical pharmaceutical lanes.3

Logistics costs have spiked as a result of these diversions and increased risk. Joshi noted that the industry is facing a “doubling of freight charges for both imports and exports, accompanied by surcharges of $4,000–$8,000 per shipment.”1 Furthermore, airspace closures in the UAE, Qatar, Kuwait, Israel, Bahrain, and Iraq have restricted major cargo hubs, forcing long-haul pharmaceutical shipments to take longer, more expensive alternative routes.3

What are the Cold Chain Integrity and Spoilage Risks?

For the pharmaceutical supply chain, the disruption of cold chain logistics presents a unique set of challenges. Temperature-sensitive products, such as vaccines and biologics, require strict environmental controls that are threatened by longer transit times and port congestion.1 The Global Cold Chain Alliance identifies a "container/reefer imbalance" as one of the key risks associated with ongoing geopolitical tensions.3

Despite the immediate pressure on margins, many executives believe the sector's structural resilience will prevent a total collapse of supply. Bhanu Prakash Kalmath S J, partner and healthcare industry leader at Grant Thornton Bharat, noted, “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.”2

To mitigate these risks, manufacturers are relying on diversified supply chains and regional distributors. Salil Kallianpur, a pharmaceutical industry expert, explained that the industry has historically managed such volatility by “operating through regional distributors, maintaining buffer inventories and using diversified logistics networks.”1 He added that “Unless there is a prolonged and severe closure of key maritime routes, the impact is likely to be temporary cost pressure rather than a sustained disruption of exports.”1

The immediate focus for drugmakers remains the calibration of cost pressures against the necessity of maintaining supply continuity. Pharmexcil is currently engaging with government authorities to explore freight relief and alternative shipping routes to minimize the long-term impact on the WANA and GCC markets.1

References

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