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.
“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.
Russia and CIS have been a major markets for Dr Reddy’s. Revenues from Russia registered 5 per cent year-on-year growth in the third quater ended December 31, 2021, at ₹4.7 billion, while the same from other CIS countries and Romania market stood at at ₹2.4 billion with a 11 per cent growth.
Other major drug exporters too are concerned over the Russia-Ukraine 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 to 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 for conclusions.’‘
Any setback in Russia and CIS market could be more painful for industry this year as exports to CIS already showed a negative trend in the first nine months of the current financial year. According to the data of the Union Ministry of Commerce, exports to CIS declined by 4 per cent at $845 million during April-December 2021, compared to $880 million in the same period the previous year.
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