Pharma exports surpass $31 billion in FY26 despite global headwinds

New Delhi: India’s pharmaceutical exports crossed $31 billion in FY26, despite a 23% year-on-year decline in March with official data showing that the industry is grappling with a sharp slowdown in the US, among the top export markets.Shipments to the US fell 10% in March while those to China, another major destination for Indian pharma, contracted 11.54%.

“When compared to exports in March FY25 ($3,681.7 million) during last fiscal, exports in March FY26 ($2,828.6 million) have declined by 23.17%,” according to the Directorate General of Commercial Intelligence and Statistics (DGCIS).

Experts attribute the current export slowdown to overstocking in the US ahead of imposition of higher tariffs on India last year, while China is focusing on high-value imports.

“The US inventory buildup due to tariffs is the reason for this slowdown,” said Namit Joshi, chairman, Pharmexcil. “Also, in China, the slowdown of generics in the domestic market could have led to this.”

Notably, exports in March rose 10.6% over February, suggesting the worst of the inventory hangover may be easing.

Exports to the NAFTA region fell 7.9% to nearly $10.6 billion.

Shipments to the UK, India’s third-largest pharma destination, slipped 1.2%, while those to Belgium and Kenya, typically an African bright spot, fell 2.8% and 3.1%, respectively. The UAE-a gateway market for broader West Asia-dipped 1.4%. Vietnam and Nepal were largely flat with the former declining 0.2%.

Africa surged 13%, Oceania rose 11.5%, and Latin America and the Caribbean expanded 10%. Europe, traditionally a slow mover, delivered 7.1% growth.

“However, these markets are more price-sensitive and logistically vulnerable, especially African trade routes that are directly impacted by Red Sea instability,” said Dinesh Dua, a pharma industry expert. “This implies that volume growth may not translate proportionately into value growth, putting further pressure on margins.”

Category wise, drug formulations and biologicals led pharma exports in the last fiscal year at $23.08 billion. Formulations and biologicals continued to hold the major share of total exports at 74.2% with exports in this category growing by 0.7%.

The real standout, however, was vaccines. At $1.5 billion and a 26.4% rise, the segment was the fastest-expanding category in the entire export basket.

Exports of Ayush and herbal products however fell 7.3% to $638.7 million in FY26.