If the Iran-US/Israel conflict goes from days into months, it will escalate API prices, and freight costs, says the industry representative said
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Dado Ruvic
Countries and drug companies usually have two-three months inventory to sustain supplies, a pharma industry-veteran told businessline. But if the conflict goes from days into months, it will escalate active pharmaceutical ingredient (API) prices, and freight costs, among other things — following delays and pressure at the sea and airports, the industry representative said. Companies send critical products by flight, and several through Dubai, he said, adding that companies are evaluating their options, in case of a prolonged conflict.
Rising rupee
A “near-term quarterly (financial) disruption” could be a potential outcome, observed Vishal Manchanda, Senior Vice-President (Institutional Research) with Systematix Group, given rising oil prices, currency fluctuation (Rupee is 92 to a dollar on Wednesday) and the increasing freight cost. Companies will be watching how the situation unfolds over the next few weeks, he added, as several companies sell to the emerging markets and West-Asia region.
India’s pharma exports stand at $30 billion, and that to West Asia is about $900-odd million, industry experts said, citing government data.
Exports will be impacted, not just to the West Asian region, but other markets including Europe as well, observed former Director-General of the Pharmaceuticals Export Promotion Council (Pharmexcil) R Uday Bhaskar, as Dubai is major trading hub, and companies have warehouses in Brussels, for example, to export into Europe.
Looking for alternatives is not easy, he said, since there is no visibility on the end to this war. March is the financial year-ending for Indian companies, and several try to make up with exports to meet their projections, he said.
Chandrachur Datta, Partner, Vector Consulting Group, points out that the sea routes were affected last year, due to the Red Sea crisis, so companies used air routes as a “fail safe” option. With the war, air routes are going to get longer, irregular, and hence costlier, besides there will be congestion and delays, he added. If the war goes over 21 days, the real trouble will start showing, he points out.
Pharmaceuticals will also be indirectly impacted, as oil prices increase — transport will get costlier, packaging materials, sending for testing, getting raw materials from ports — “everything might either get delayed or gets costlier”, he said, adding that there will be pressure on all industries, specifically on pharmaceuticals that has a lot of cross-country transportation.
Published on March 4, 2026