Pharma exporters feel the pinch – The Hindu BusinessLine

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CIS region is a major drug export destinaion for Indian industry

The Russia-Ukraine war is sending tremors to Indian drug exporters and is likely to have an adverse impact on pharma companies and the total volume of exports this fiscal.

Major drug exporters, including Dr Reddy’s Laboratories Ltd, have a significant presence in the Russia-CIS region, both in terms of employees as well as the market.

When contacted, a spokespersonof Dr Reddy’s Laboratories told BusinessLine on Thursday that thecompany had a presence in the region for over three decades.

“Ensuring the well-being of our staff is our first and foremost priority, along with measures to meet patient needs and business continuity.We have been monitoring developments closely and preparing accordingly, and continue to do so,” the spokesperson added.

Revenues from Russia

Russia and CIS have been a major markets for Dr Reddy’s.Revenues fromRussia registered 5 per cent year-on-year growth in the third quarterended December 31, 2021, at Rs. 4.7billion, while the same fromotherCIS countries and Romanianmarket stood at Rs. 2.4billion, with a 11 per cent growth.

Other major drug exporters, too, are concerned over the war.

“The present political situation will have a rippling effect for two to three quarters, assuming the war will stop soon with international intervention. If it escalates further, then there is no option but stop exports for some time,” said one of the directors of a major listed pharma company.

According to R Uday Bhaskar, Director-General, Pharmaceutical Export Promotion Council (Pharmexcil), both Russia and Ukraine are very important export destinations. “Our exports to these countries are $770 million, out of a total $1,178 million to CIS during FY21,” he said.

“Russia and Ukraine are important export destinations in CIS. There may be problem for the new dispatches as logistics and payment issues may crop up,” said Bhaskar, adding: “We need to wait and watch. It may be too early to rush to conclusions.”