Iran War Pushes Up Prices Of Raw Material In Pharma Industries: Will Vitamins, Antibiotics Be Costlier?

Last Updated:March 11, 2026, 06:30 IST

The rise in raw material costs cannot immediately be passed on to patients as prices of many medicines in India are regulated by the National Pharmaceutical Pricing Authority

The ongoing conflict between Iran and US-Israel in West Asia is now affecting India’s pharmaceutical supply chain – pushing up the cost of raw materials used in drug manufacturing while raising concerns in the industry on further price volatility.

Industry executives told News18 that the prices of key starting materials (KSM) and active pharmaceutical ingredients (API) have started rising.

Over the past week, the cost of several inputs has increased by 5 to 100 percent, driven by currency fluctuations, higher petroleum-linked costs, and emerging disruptions in global shipping. Officials warned of possible shortages if the war stretches for a long period.

“There could be shortage of medicines as traders aren’t taking any orders for raw materials," Sandeep Arora, chief executive officer at Baddi-based firm Ultra Drugs, told News18.

He added: “Prices of solvent have increased genuinely but also, traders and suppliers are trying to take advantage of the war situation by pushing the price rise further."

WHICH APIs ARE AFFECTED?

Arora shared a list of APIs where prices have already started moving up. Sample this: muscle spasm relieving drug, Thiocolchicide, has recorded one of the highest increases rising from Rs 3.4 lakh to Rs 7 lakh – a jump of over 100 percent.

Other inputs such as glycerin, nimesulide, deflazacort and clobetasol propionate have also seen increases ranging between about 45 and 65 percent.

But, the rise in raw material costs cannot immediately be passed on to patients as prices of many medicines in India are regulated by the National Pharmaceutical Pricing Authority (NPPA). This forces pharmaceutical companies to absorb the higher input costs.

WHAT ARE THE REASONS BEHIND PRICE RISE?

One of the immediate pressures comes from the strengthening of the US dollar and the weakening of the Indian rupee.

Since most pharmaceutical raw materials are globally traded in dollars, its strength automatically increases the import cost for Indian manufacturers, many of whom heavily rely on imported APIs and intermediates.

Another factor is the rise in the cost of solvents – essential chemicals used in drug manufacturing processes. “Solvent prices are closely linked to petroleum and crude oil derivatives. As geopolitical tensions push up oil prices and raise concerns about supply disruptions, the cost of these solvents increases almost immediately, adding to manufacturing expenses," said Mehul Shah, merchant importer of APIs from China and other countries.

Other experts also echoed similar concerns.

“Methanol and acetone are very important solvents needed in the manufacturing process of APIs," Udaya Bhaskar, former director-general of Pharmaceuticals Export Promotion Council of India, which is a wing under the ministry of industry and commerce. “Also, solvents are by-products of petroleum, hence with the increase in oil prices, the cost has gone up. In some cases, the cost of solvents has increased by 20 to 25 percent in the last few days."

Industry sources said logistical disruptions are also beginning to emerge. “The vessels and containers are getting delayed or stuck due to heightened security concerns and congestion along key maritime routes, affecting the movement of pharmaceutical raw materials. There is a shortage of containers as many have not returned to ports," said an industry executive working at a Mumbai-based pharmaceutical firm.

WHO WILL BE IMPACTED?

Bhaskar said in the current scenario, small drugmakers will bear the brunt more.

“The freight prices have increased due to several factors, including the insurance cost, as due to the war the risk of shipping costs has increased.  In case of high-volume and low value products like, for instance: paracetamol, omeprazole, and others – where waterways are used not airlines for exports as the kilo cost is relatively lesser, around $15 –  the manufacturer cannot afford to pay $6 to $7 as freight cost. This would impact the MSME drugmakers more," he said.

WHAT HAPPENS?

According to the government data, India imports around 65 to 70 percent of its APIs, intermediates and key starting materials from China.

Any disruption in Chinese supplies or increase in input costs, therefore, quickly translates into higher production costs for Indian companies.

“The first impact is being seen in vitamins and nutritional ingredients, a category where India depends heavily on imports from China," Shah said. 

He added: “Prices of several vitamin inputs have already moved up as China adjusted for higher input and logistics costs. Another segment facing pressure is antibiotics, particularly the cephalosporin class, where China supplies a large share of intermediates and APIs. The increase, last week, has been around up to 10%."

Data shared by four industry sources – all executives at pharmaceutical firms based in India and involved in importing APIs and KSMs – shows a sharp rise in the prices of several pharmaceutical raw materials between December 2025 and March 2026. Some ingredients have seen steep increases, reflecting the broader pressure building across the pharmaceutical supply chain.

Commonly used ingredients including diclofenac sodium, montelukast sodium, paracetamol and ornidazole have also become costlier, with price rises of roughly 20 to 30 percent. Several antibiotics and anti-infective ingredients such as ciprofloxacin HCL, cefpodoxime proxetil, amikacin sulphate and gentamicin sulphate have also seen price increases.

As the situation remains uncertain, manufacturers are closely tracking developments in oil prices, currency movements and global shipping routes – all of which could further influence the cost of pharmaceutical raw materials in the coming weeks.

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