US, West Asia drag India's pharma exports growth

India's pharmaceutical exports to the US, the industry's largest market, fell 6.31% in the April-May period, continuing the trend from the previous fiscal year, show government data. Shipments to the West Asia North Africa (WANA) region also shrank in the first two months of this fiscal year.

Despite this pressure from two key markets, India's total pharmaceutical exports grew 6.63% during the period to more than $5.29 billion.

According to the data, shipments to the US were valued at $1.6 billion, or just over 30% of India's total pharma exports during the two months.


Shipments to the broader North American Free Trade Agreement (Nafta) region comprising the US, Canada and Mexico fell 4.74% from a year earlier to $1.79 billion, accounting for 33.85% of the total pharma exports.

Exports to the WANA region dropped by 0.37% amid the Middle East crisis. Though narrow, this was particularly notable as WANA was the only region besides Nafta to contract during the period.

The Middle East crisis has disrupted trade flows and demand patterns in the region, with industry stakeholders flagging it as an emerging headwind to watch in the coming months, though tension has somewhat eased with a temporary ceasefire between the US and Iran.

"The US continues to de-grow, and this month we can also observe the de-growth in the WANA region due to the Middle East crisis," Pharmaceuticals Export Promotion Council of India chairman Namit Joshi said. "Though at a minuscule level, the trend of exports to China is positive, which seems to be a good sign for the Indian pharma industry," he said.

Vaccine exports grew the fastest among all categories at 37.47%. Regions like Asean (26.80%), Latin America and the Caribbean (23.96%), Africa (13.38%) and Europe (13.30%) posted robust growth, helping offset the softness in the US and WANA markets. South Asia (12.47%), Northeast Asia (8.72%), Oceania (5.60%) and CIS (1.08%) also posted expansion.

Drug formulations and biologicals continued to lead with a 73.89% share of exports, growing 4.04%, while bulk drugs and drug intermediates expanded 13.59%. The only category in decline was Ayush and herbal products, shrinking 11.24%.

Industry insiders see the China data as a potentially encouraging diversification signal for exporters looking to reduce dependence on traditional markets. Barring the US, four of the top five pharma export destinations-Brazil, the UK, the Netherlands and France-helped anchor overall growth during the period.