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Indian pharma industry to feel deep impact of crisis in Afghanistan
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Nandita Vijay, Bengaluru
August 24 , 2021
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Afghanistan is fully dependent on imports for medicines and medical devices and imports 80% of the country’s pharmaceutical product requirements since it does not have adequate infrastructure to produce medicines locally to meet the market demand. India accounts for about 10% of these imports.
Being a war-torn country, Afghanistan has always been a big consumer on medical supplies with India catering to a large part of this demand.
Besides this, increasing healthcare needs driven largely by a growing geriatric population together with lifestyle disorders and infectious diseases across all age groups and demand for pediatric formulations have created opportunities for Indian pharma. After being battered by Covid-19, Afghanistan figures among India’s key trade partners.
And with India being the hot house of generics, Afghanistan looks to it for quality and affordable drugs too, said pharma industry observers.
The geopolitical crisis has impacted trade not just because of the chaotic internal situation but also because of the disruptions of trade routes with a key transit route through Pakistan blocked.
With Kabul falling into the hands of the Taliban, bilateral trade between Afghanistan and India will be impacted significantly. In fact, one of the first things that the Taliban did after taking control of Kabul was to stop all imports and exports with India. Trade is expected to come to a complete standstill for some time as the situation in the country is out of control, Archana Dubey, vice president, international marketing, Bal Pharma told Pharmabiz.
Total exports from India to Afghanistan were US$ 826 million in 2020-21 and pharmaceutical exports contributed around 10% to that. These numbers are expected to significantly go down in the coming months, as the major issue would remain forex availability in the country. Payments would remain an issue and no exporter would risk high exposure in these uncertain times. However as things settle down, pharmaceuticals would be the first industry to benefit as medicines would remain high priority need for the country.
As a company, Bal Pharma’s exposure to Afghanistan was limited and we are not at risk of losing significant revenue due to the chaos in the country. However, we expect things to settle down and improve towards the end of the year and normal business would resume by early next year.
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