Medicine prices in India could increase in the coming months as the cost of key pharmaceutical raw materials has surged sharply due to disruptions in global supply chains linked to ongoing geopolitical conflicts amid Israel-US-Iran war.
Industry reports indicate that the price of active pharmaceutical ingredients (APIs) and other key inputs used in drug manufacturing has increased by nearly 30% in recent weeks, creating pressure on pharmaceutical companies that rely heavily on imported materials for production.
APIs are the essential components used to manufacture medicines, and India imports a significant portion of these materials, particularly from China.
Experts say the price increase is partly linked to geopolitical tensions affecting shipping routes and global logistics.
A shortage of container ships and rising freight charges have restricted the movement of raw materials required by Indian drug manufacturers. This has delayed shipments and increased costs for pharmaceutical companies.
Some raw materials have recorded significant price increases in recent months. For example:
Glycerine prices have risen by about 64% since December
Paracetamol raw material prices have increased by around 26%
In addition, pharmaceutical solvents derived from petrochemicals have risen 20–30% within a short period, partly due to disruptions in global oil supply linked to Middle East tensions.
If the conflict continues and shipping disruptions worsen, experts warn that the pharmaceutical supply chain could face further instability.
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Pharmaceutical manufacturers say the sudden surge in production costs is difficult to absorb because the industry operates under strict price controls.
Harish Jain, national president of the Federation of Pharma Entrepreneurs, highlighted the challenge faced by manufacturers.
He stated that “the pharma industry being highly price regulated, it is difficult to absorb the unprecedented increase in price of inputs.”
Drug prices in India are regulated by the National Pharmaceutical Pricing Authority (NPPA) under the Drug Price Control Order (DPCO).
Industry representatives have urged authorities to consider temporary adjustments to pricing regulations if raw material costs continue to rise significantly. According to industry stakeholders, such measures could help pharmaceutical companies maintain production without supply disruptions.
However, any changes in pricing policies would require government review and regulatory approval.
If raw material shortages persist and production costs continue rising, pharmaceutical companies may face challenges maintaining current production levels.
Many manufacturers operate with just-in-time inventory systems, meaning they maintain minimal stock of raw materials to reduce costs. This makes the industry more vulnerable to sudden disruptions in global supply chains.
In addition to domestic markets, the situation may also affect India's pharmaceutical exports, particularly to countries in the Middle East and North Africa, which depend heavily on Indian generic medicines.
(Rh)
