West Asia crisis hits Indian pharma exports; industry calls for ‘Health Security Corridor’ to secure supply chains

The ongoing West Asia crisis which has triggered disruptions in the Strait of Hormuz is taking a tangible toll on India’s pharmaceutical, preventive healthcare and medical devices sectors, pushing up costs and complicating global supply chains.

Analysts and industry leaders warn this could weaken the reliability of India’s export competitiveness to key markets in the US, EU and West Asia amid elevated freight, insurance and input costs.

“The ongoing Strait of Hormuz blockade and escalating West Asia tensions have driven up medical device input costs by nearly 50 per cent for critical plastics, over 20% for packaging and self-generated power running on diesel while nearly doubling Adani PNG gas prices used for power generation and process heating with reduced availability. This is eroding razor-thin margins on essentials like syringes, nitrile gloves, catheters and plastic disposable medical devices in a highly competitive, volume-driven market,” said Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD).

While current supplies remain stable, Nath emphasised the financial pressure on manufacturers: “Supplies other than LPG (affecting a few examination glove manufacturers using it as a heat source) have not been disrupted. However, we are seeing substantial price increases, longer lead times and highly elevated freight costs, which are pressuring cost structures and planning cycles. Many manufacturers have adjusted product pricing by 10-20% to sustain operations. There is no acute shortage in key polymer grades like Polypropylene, HDPE or LDPE, but evolving global supply chain dynamics require close monitoring to prevent impacts on production timelines and industry stability.”

AiMeD has urged the government to intervene urgently, including reducing inland freight charges, speeding up GST refunds and offering temporary rebates on raw materials and components imports to safeguard jobs and ensure affordable healthcare access.

Surging costs and production pressures

Indian pharmaceutical and preventive healthcare exports are experiencing significant disruptions due to the West Asia crisis. Rising shipping costs, broken logistics routes and crude-linked API price pressures are affecting production and export reliability.

“The West Asia crisis is disrupting India’s pharma and preventive healthcare exports, with potential losses of ₹2,500–₹5,000 crore resulting in rising freight and insurance costs, and delays across Red Sea routes. Subsequently, input cost pressures from crude-linked APIs and packaging are tightening production cycles and affecting export reliability,” said Sanjaya Mariwala, Executive Chairman & Managing Director of OmniActive Health Technologies Ltd.

He stressed the need for proactive solutions, including a dedicated India–GCC Health Security Corridor, pooled war-risk insurance, dynamic freight equalisation funds, and three-month export buffers at western ports. Long-term strategies such as supply chain resilience clauses in FTAs and backward integration of APIs were also highlighted as critical to sustaining export competitiveness.

Echoing this, Amit Srivastava, Founder of Nutrify Today said: “The West Asia crisis is putting Indian pharmaceutical and preventive healthcare exports to the test. Rising shipping costs and broken logistics routes are real problems, especially for nutraceutical and functional health exporters who have lower profit margins than regular pharmaceutical companies. Southeast Asia, East Africa, and Latin America are places where Indian preventive healthcare products have strong scientific backing and are competitively priced. The unrest in the Middle East should speed up India’s plans to diversify, not slow them down.”

Diverging impacts on healthcare providers

Despite export and production pressures, domestic hospitals and medical equipment supplies have so far remained unaffected. A spokesperson of Apollo hospital said “We have not seen any immediate impact on medical equipment supplies due to the ongoing West Asia conflict. Medical value travel continues to contribute steadily to our business. Bangladesh remains a key source of international patients, and is expected to grow. While the patient flow from Africa could be impacted due to travel restrictions, we expect this impact to be short-term in nature. We are also pursuing opportunities to expand international patient outreach in markets including Indonesia, Mauritius, and Sri Lanka as part of our strategy to diversify our global patient base,” said an Apollo spokesperson.