India has signed free trade agreements with several countries and is negotiating one with the EU. Market access is now no longer a problem. But the assumption that goods will move freely once markets open up is beginning to weaken.
Disruptions in West Asia are adding 10-15 days to transit times, while freight and insurance costs have risen sharply, which cannot be passed on to customers given the margin pressures. For exporters, the bigger challenge is in committing to delivery timelines.
At the same time, planning shipments has become a lot less predictable. Buyers are building in buffers or delaying decisions. For businesses operating on tight margins, even modest increases in logistics costs can shift competitiveness.
In pharmaceuticals and preventive healthcare, the pressure is more layered. India exported over $30 billion worth of medicines last year, but a large share of key inputs continues to be imported, particularly APIs from China. This creates a clear dependency at both ends. If inputs don’t arrive on time, production gets pushed back. And when outbound routes are disrupted, finished products can’t move as planned. What starts as a logistics delay doesn’t stay limited to transport — it begins to affect manufacturing timelines and, in regulated markets, even compliance. In sectors like pharmaceuticals, where timing is tightly controlled, these delays can have consequences well beyond just late deliveries.
Route concentration
A large share of India’s exports still moves through a limited set of routes and logistics hubs. That concentration works in stable conditions, but leaves little room to adjust when disruptions occur. Smaller exporters don’t have the cushion to absorb sudden cost increases, so either take a hit on their topline or bottomline.
India has built an export system that performs efficiently under stable conditions, but not one that adjusts easily when those conditions change. Alternatives are usually explored only after problems on routes show up. There isn’t advanced thinking around which sectors depend on which routes, or what realistic options exist if those routes are disrupted. As a result, decisions end up being made under pressure, when both costs and timelines are already working against you. Urgent shipments like medicines don’t really get treated any differently.
When freight costs rise or insurance premiums increase, exporters are usually the first to absorb the impact, even though these are outside their control. Over time, this has concentrated volatility at the weakest end of the chain. Contracts will need to evolve to reflect a more balanced arrangement, where pricing and delivery terms adjust when disruptions occur. Without that shift, exporters will continue to operate under pressure each time the system is strained.
Flexible sourcing
In pharmaceuticals and preventive healthcare, resilience will depend on building flexibility into sourcing. Domestic API capacity will take time to scale. Until then, alternate sourcing and manufacturing arrangements across geographies can help reduce the risk of production being disrupted.
Exporters face immediate cost pressures, but access to additional working capital often lags. Aligning financial support more closely with the timing of disruptions would help ease that pressure.
Trade agreements, too, will need to reflect the new reality. Provisions that support faster clearances, recognise alternate routing and improve coordination across systems can strengthen trade in ways that go beyond cost or tariff advantages.
India still tends to assume that once an order is ready, it will move smoothly from origin to destination, but that’s no longer always the case. In a world where disruption is becoming routine, competitiveness will be defined not just by how much a country can export, but by whether it can keep exporting when conditions deteriorate.
The writer is Executive Chairman and Managing Director of OmniActive Health Technologies
Published on April 29, 2026