Hyderabad: The Ministry of Commerce and Industry is taking measures to actively incentivise the Indian pharmaceutical sector so it can diversify and increase exports in the wake of the West Asia crisis and insulate the country’s medicine makers from US-dependent exports, a senior official of the ministry has said.
A 100 per cent import duty exemption on all petrochemical products, including solvents such as acetic acid and ammonia, trade facilitation, and protection of Indian manufacturing units from surging production costs are key measures taken by the commerce ministry and Pharmexcil, the Pharmaceutical Exports Promotion Council of India.
The US accounts for a third of India’s pharma exports annually. In April 2026 alone, drug exports to the North American Free Trade Agreement (NAFTA) region comprising the United States, Canada, and Mexico dropped by 8 per cent in value terms compared to April 2025, data shared by Pharmexcil revealed. In April 2025, India exported medicines worth $11,466.25 million, compared to the April 2026 figures of $10,558 million.
Deputy Director, Ministry of Trade and Commerce, Ravi Teja explained why exports to the US have declined. He said the US stockpiled medicine reserves before imposing punitive tariffs on India and other countries, adding that the West Asia war, the closure of the Hormuz Strait and critical maritime corridors, and a sharp rise in prices of petroleum-based derivatives and solvents caused a dip in exports.
“We have identified the pharmaceutical industry as a critical sector to ensure import duty exemptions are accorded, and Liquified Petroleum Gas (LPG) supply is committed. In addition, our market access initiatives, production-linked incentives, and identification of newer markets to diversify our export base will help us mitigate any reduction in pharma exports,” Teja said at Pharmexcil in Hyderabad on Tuesday.
To offset the tailwinds from the US market, India is capitalising on drug shortages reported by economies in Europe. Countries with sizeable populations, such as Germany, France, Spain, Italy, Belgium, and Finland, have all reported shortages of critical pharmaceutical ingredients and medicines. “The health minister from the Netherlands visited New Delhi, asking for a batch of medicines to be supplied while also seeking assistance from Indian pharma giants to help scale their pharmaceutical industry,” a senior member of Pharmexcil told ThePrint on the condition of anonymity.
Despite the interim aberrations, data shared by commerce ministry officials shows that India’s pharmaceutical exports have grown from $14 billion in FY 2015 to $31 billion in FY 2026. These figures currently make India the third-largest producer of pharmaceuticals by volume, supplying around 20 per cent of global generic demand, and exporting to more than 200 countries. More than 60 per cent of India’s pharmaceutical exports go to stringently regulated markets.
An uninterrupted supply of medicines through the Covid pandemic, a rise in the volume of vaccine exports thereafter, and aggressive targeting of new regions helped India’s exports increase exponentially, the officials told ThePrint.
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Target 2030
India has set a target of increasing its bulk drugs, formulations, and vaccine exports to $130 billion by 2030. To achieve this ambitious figure, several measures are being taken by the government and industry.
First, India is working with regulators in more than 25 countries to speed up the acceptance of its pharmacopoeia. A pharmacopoeia is a legally binding reference book containing directions for the identification, preparation, and analysis of medicines. It establishes mandatory quality standards—including purity, strength, and packaging—to ensure pharmaceuticals are safe and effective for public use. Without this step, it would be difficult for Indian-made medicines to find a market in newer geographies.
Second, the government is encouraging large private companies to adopt a hub-and-spoke model for manufacturing and distribution of medicines. Instead of relying solely on organic growth, pharmaceutical companies are being asked to locate their manufacturing facilities in countries that can serve the entire region. “For instance, if a leading pharma giant establishes a large manufacturing facility in Malaysia or Singapore, it can serve the entire Southeast Asia region. We are actively engaging with India’s top exporters to step up and make use of the advantage presenting itself,” the ministry official said.
Third, India is formulating a plan to empower smaller nations in Africa, Scandinavia, and Latin America to develop their own pharmaceutical policies and produce their own critical drugs, so they become self-sufficient in critical and over-the-counter medicines. Pharma analysts at Angel Broking who ThePrint spoke to said the COVID pandemic exposed faultlines in pharma supply chains of many countries. About 50 smaller nations lack the muscle to make basic drugs such as paracetamol and anti-histamines, the analyst shared.
“It is these lacunae that India is looking to address even as we broaden our scope of being the world’s pharmacy. By empowering nations to make their own drugs and assisting them in meeting the stringent regulatory standards, India would be able to achieve its mission of One Earth, One Health. The world seeks quality, continuity, and affordability in healthcare supply chains. India offers all three,” Ravi Teja said.
Stating that regulatory cooperation will be central to India’s transition to the next stage, the pharma analyst at Angel Broking said that “market access for medicines is health diplomacy. Regulatory cooperation is economic diplomacy. Trust between regulators is a strategic partnership that India should look to forge quickly.”
Currently, 74 per cent of India’s pharma exports are formulations, 16 per cent are bulk drugs, and 10 per cent are vaccines.
(Edited by Nardeep Singh Dahiya)
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