The Russia-Ukraine situation, as well as sanctions imposed on Russia by numerous western countries, including the United States may hamper Indian pharmaceutical exports, according to industry leaders.
Executives in the pharmaceutical industry are concerned that sanctions against Russian banks may have a negative impact on remittances of outstanding trade receivables from that country.
If the crisis worsens, Western governments have threatened to impose more sanctions.
Dr. Reddy’s and Sun Pharma, who have major front-end presence in both Russia and Ukraine, said they are closely monitoring the situation and that their primary concern right now is staff safety.
“Our first and foremost goal is to ensure the well-being of our employees, followed by satisfying patient needs and maintaining business continuity,” said a representative for Dr. Reddy’s, which has had a presence in the region for more than three decades. “We’ve been keeping a careful eye on things and planning accordingly.”
Sun Pharma, India’s largest drugmaker with operations in both nations, said it is “hoping for the best outcome.” “We’re in close contact with our personnel in both countries, and they’re safe,” stated a business spokeswoman.
According to the Pharmaceuticals Export Promotion Council (Pharmexcil), which is part of the commerce department, India shipped pharmaceuticals worth $591 million to Russia and $182 million to Ukraine in 2020-21, as per Commerce Department’s Pharmaceutical Export Promotion Council (Pharmexcil). The impact on pharmaceutical exports, according to Dinesh Dua, former chairman of Pharmexcil and CEO of Nectar Lifesciences, may not be significant. However, if the West’s sanctions against Russia get more severe, the industry may find it difficult to do business there, he said.
In the past, Indian pharmaceutical companies have had similar issues with Iran and Venezuela. “We couldn’t transact business in Iran for a long time,” Dua explained. “It’s possible that Russia’s business will develop like that.”
Russia accounts for 2.4% of the country’s overall pharmaceutical exports, while Ukraine accounts for 0.74%. In FY21, India exported $24.5 billion in medicines. In FY21, Dr Reddy’s revenues from Russia were at Rs 1,580 crore, or 8.5% of total revenues. It is also one of Ukraine’s top ten pharmaceutical enterprises.