Pharma exports hit five-year low in March on West Asia war

TL;DR

India's pharmaceutical exports dropped 23.17% in March, the sharpest monthly fall in at least five years.
West Asia war disrupted Gulf shipping and air hubs like Dubai and Abu Dhabi, doubling container costs to $2,400 per unit.
Losses estimated at ₹2,500-₹5,000 crore after strong FY26 growth of 5.6% in first 11 months to $28.29 billion.[[1]](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-exports-fall-to-five-year-low-in-march-amid-west-asia-crisis/articleshow/130317276.cms)

The story at a glance

India's pharmaceutical exports fell sharply by 23.17% in March due to the West Asia war choking key shipping routes and air transit hubs in the Gulf. This marked the steepest monthly drop in at least five years, with industry experts estimating losses of ₹2,500-₹5,000 crore. The report comes right after official trade data release, amid ongoing conflict that started late February and hit pharma flows to Europe, North America, and Africa. Pharma had seen solid growth earlier in FY26.[[1]](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-exports-fall-to-five-year-low-in-march-amid-west-asia-crisis/articleshow/130317276.cms)

Key points

Exports slumped amid disruptions to Red Sea, Strait of Hormuz, and Gulf corridors, with freight surcharges jumping to $3,500-$8,000 per shipment; some lines refused Gulf cargo.
Container costs for active pharmaceutical ingredients from China doubled overnight from $1,200 to $2,400 per unit.
Missile activity shut airports in Dubai, Abu Dhabi, and Doha, forcing reroutes overland via Jeddah and Riyadh, risking cold-chain integrity for biologics, oncology drugs, and vaccines.
First 11 months of FY26 showed 5.6% year-on-year growth to $28.29 billion, but full year ended with modest 2.13% rise.
A large share of exports to Europe, North America, and Africa relies on Gulf transit points.
Overall FY26 pharma exports faced headwinds after pre-war momentum toward a strong year.[[1]](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-exports-fall-to-five-year-low-in-march-amid-west-asia-crisis/articleshow/130317276.cms)

Details and context

The West Asia war, which began late February, intensified in March, directly hitting pharma logistics that depend heavily on Gulf hubs for transshipment. Pre-conflict, generic drugs moved smoothly to the US, Europe, and Africa, with industry on track for robust FY26 results.

Rerouting added transit time and costs, threatening temperature-sensitive products like refrigerated vaccines. This comes atop broader export pressures, though pharma held up better than some labour-intensive sectors that saw even steeper March drops.

India's pharma sector had built momentum with rising demand for formulations, biologicals, and vaccines, but the sudden logistics choke exposed vulnerabilities in global supply chains routed through the region.[[1]](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-exports-fall-to-five-year-low-in-march-amid-west-asia-crisis/articleshow/130317276.cms)[[2]](https://m.economictimes.com/news/economy/foreign-trade/labour-intensive-sectors-see-steep-fall-in-exports-in-march/articleshow/130317440.cms)

Key quotes

"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." – Dinesh Dua, former chairman at Pharmexcil.[[1]](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-exports-fall-to-five-year-low-in-march-amid-west-asia-crisis/articleshow/130317276.cms)

"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." – Anonymous executive.[[1]](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-exports-fall-to-five-year-low-in-march-amid-west-asia-crisis/articleshow/130317276.cms)

Why it matters

The drop highlights how regional conflicts can quickly ripple through global pharma supply chains, raising costs and delaying essential medicines worldwide. Indian exporters face $300-500 million in direct losses, squeezing margins amid already tight competition in generics. Watch for April-May trade data and any ceasefire effects on freight rates, though full recovery could take months if disruptions persist.[[1]](https://economictimes.indiatimes.com/industry/healthcare/biotech/pharmaceuticals/pharma-exports-fall-to-five-year-low-in-march-amid-west-asia-crisis/articleshow/130317276.cms)