He also urged the pharmaceutical industry to reduce dependence on imported raw materials and build more flexible export-import links.Speaking on the sidelines of the ‘Chintan Shivr – Expanding Pharmaceutical Exports’ conference in Hyderabad, Agrawal said the government has already seen an impact on both imports and exports over the past month due to the Middle East crisis, with energy imports and regional trade flows under pressure.
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“The Middle East is also an important market. About 12 to 13 percent of our exports go to the region. So, that will be directly affected.
If this continues for a long time, our exports to other parts of the world may also be affected as some value chains will go backwards. “We are aware of that,” Agrawal told reporters, according to news agency PTI.He said the precise impact of the conflict on India’s trade would become clearer in the next two weeks, but noted that exports and imports may see some decline.“I assume it will not just be one-way traffic, in terms of exports falling, but imports will see some decline as well,” he added.
Agrawal warned that even if the war ends soon, the disruption could last for months or even years, depending on the extent of the damage to supply chains and infrastructure.“So, at this point, it’s going to be very difficult to take a long-term view on this,” he said.He said the center is trying to ensure that supply chains face minimal potential disruption, while acknowledging that some trade numbers may decline in the near term.
The pharmaceutical sector is already feeling the supply pressure
The Commerce Minister said the pharmaceutical sector has already seen some impact on the availability of key intermediates and solvents as supply chains are affected by the regional crisis.Agrawal said all arms of the government are working to prioritize limited LPG supplies and are trying to mitigate the situation by diversifying imports and sourcing from alternative suppliers.“So, as we are able to resolve that aggregate supply, we will try to alleviate some of the pain in each sector.
He said that the pharmaceutical sector will be one of the priority sectors.He added that the government and industry are jointly working on ways to make supply chains more resilient.
Advocating for self-reliance in APIs, bulk and intermediate medicines
At the same event, Agrawal asked the pharmaceutical industry to use the current geopolitical uncertainty as a catalyst to reduce dependence on critical imported inputs and enhance 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 local production, while reducing dependence on critical imports for APIs, bulk drugs and intermediates.”He also stressed “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 and affordable medicines, saying quality will remain the deciding factor in healthcare. He urged the sector to build a stronger quality ecosystem to enhance global confidence and alignment with emerging areas such as biologics and biosimilars.He also encouraged the industry to shift from a volume-based model to a value-based model, with greater emphasis on innovation and new patents, while maintaining India’s strength in generic medicines.
Exports remain on a positive path despite the uncertainty
Despite the geopolitical implications, Agrawal said India’s exports in the last fiscal year are expected to remain on a positive trajectory.The broader picture of pharmaceutical exports remains resilient. Indian pharmaceutical exports reached $30.47 billion in 2024-25, an increase of 9.4 per cent over the previous year.During the period from April to February 2025-2026, pharmaceutical exports amounted to $28.29 billion, registering a growth of more than 5 percent compared to the corresponding period of the previous year.India remains the world’s third-largest pharmaceutical producer by volume and 14th-largest by value, highlighting the size of the sector and the risks involved in insulating it from external shocks.
