A prolonged conflict in Middle East could begin to hurt India’s exports not just to the region but also to other global markets, as disrupted supply chains ripple outward, commerce secretary Rajesh Agrawal said on Saturday, He also urged the pharmaceutical industry to reduce dependence on imported raw materials and build more resilient export and import linkages.Speaking on the sidelines of ‘Chintan Shivir – Scaling Up Pharma Exports’ in Hyderabad, Agrawal said the government has already seen an impact on both imports and exports over the past month because of the Middle East crisis, with energy imports and regional trade flows under pressure.“Middle East is also an important market. Around 12-13 per cent of our exports go to the region. So, that will directly get impacted. And if it goes on for long, maybe our exports to other parts of the world will also get impacted as some of the value chains will rotate back. We are cognizant of it,” Agrawal told reporters, as per news agency PTI.He said the exact impact of the conflict on India’s trade would become clearer in the next couple of weeks, but indicated that both exports and imports could see some decline.“And I assume, it will not only be a one-way traffic, in terms of export going down, but it will also be imports having some downfall,” he said.Agrawal cautioned that even if the war ends soon, the disruption may linger for months or even years, depending on the extent of damage to supply chains and infrastructure.“So, at this juncture, it will be very difficult to take a very long-term view on it,” he said.He said the Centre is trying to ensure that supply chains face the minimum possible disruption, while acknowledging that some trade numbers may soften in the near term.
Pharma sector already feeling supply pressure
The commerce secretary said the pharmaceutical sector has already seen some impact in the availability of key intermediates and solvents because supply chains are getting affected by the regional crisis.Agrawal said all arms of the government are working to prioritise limited LPG supply and are attempting to ease the situation by diversifying imports and sourcing from alternative suppliers.“So, as we are able to resolve that overall supply, we will try to alleviate some of the pain in every sector. The Pharma sector will be one of the priority sectors,” he said.He added that the government and industry are jointly working on ways to make supply chains more resilient.
Call for self-reliance in APIs, bulk drugs and intermediates
At the same event, Agrawal asked the pharmaceutical industry to use the current geopolitical uncertainty as a trigger to reduce dependence on critical imported inputs and strengthen domestic capacity.Addressing industry stakeholders in Hyderabad, he stressed “the importance of ensuring greater self-reliance by meeting 80-90 per cent (or higher) of domestic pharmaceutical requirements through indigenous production, while reducing critical import dependencies in APIs, bulk drugs, and intermediates”.He also emphasised the “importance of insulating import supply chains in a geopolitically fragmented world, where availability may be important”.Agrawal called for a broader strategic repositioning of India as a global hub for quality, affordable pharmaceuticals, saying that quality would remain the decisive factor in healthcare. He urged the sector to build a stronger quality ecosystem to enhance global trust and align with emerging areas such as biologics and biosimilars.He also encouraged the industry to shift from a volume-driven to a value-driven model, with greater focus on innovation and new patents, while maintaining India’s strength in generics.
Exports remain on positive path despite uncertainty
Despite the geopolitical overhang, Agrawal said India’s exports in the last financial year were expected to remain on a positive trajectory.The broader pharmaceutical export picture remains resilient. India’s pharma exports stood at $30.47 billion in 2024-25, up 9.4 per cent over the previous year.During April–February 2025-26, pharma exports reached $28.29 billion, registering growth of over 5 per cent compared with the corresponding period of the previous year.India remains the third-largest producer of pharmaceuticals globally by volume and 14th by value, underscoring both the sector’s scale and the stakes involved in insulating it from external shocks.