Border tensions with Pak open $200 mn pharma window for India in Afghanistan | Today News

New Delhi: Afghanistan’s border tensions with Pakistan, which led to the shutdown of vital transit routes, may have opened up a $200 million pharmaceutical opportunity for India.

India is expanding its pharmaceutical footprint in Afghanistan, a region of significant geopolitical importance, in the backdrop of the conflict-ridden nation’s tense ties with Pakistan, according to three government officials and documents reviewed by Mint.

India is positioning itself as a reliable provider of high-quality medicines to address acute shortages in the Taliban-ruled Afghanistan. This comes in the backdrop of high-level discussions between the Pharmaceuticals Export Promotion Council of India (Pharmexcil), a body under the commerce ministry, and the Afghanistan government in December, with a focus on New Delhi extending help to Kabul to set up laboratories and upgrade their manufacturing facilities.

India is currently "evaluating the synergy” and exploring trade opportunities with Afghanistan, a senior Pharmexcil executive said on the the condition of anonymity.

“With certain regional trade corridors closing, a $200 million opportunity has emerged for Indian generics to fill the gap. This people-centric approach allows India to remain a key regional stakeholder. We are fulfilling humanitarian needs while following the discreet requirements of government policy,” said this Pharmexcil executive.

Afghanistan is a land-locked country, and depends heavily on these two routes for exports, imports, and access to seaports via Pakistan.

India's pharmaceutical exports totalled $30.46 billion in the financial year ended 31 March, 2025. Of this, Afghanistan accounted for 0.39% or $108 million, which was a 20% increase over the previous fiscal.

According to Pharmexcil, this growth is driven by high demand for Indian generic formulations, filling a critical market gap as traditional regional trade corridors face disruptions.

“India is maintaining a discreet approach to this engagement. This approach allows India to provide essential relief and protect its commercial interests without making a political statement,” said a second government official, requesting anonymity.

India's caution stems from the fact that the Taliban regime is not formally recognised by most countries, except Russia, after it seized power in August 2021. Still, many nations engage with the de facto rulers pragmatically without full diplomatic legitimacy.

“Given the absence of a recognized government to provide financial guarantees, the risk of capital loss remains a primary concern. So, engagement largely focuses on technical support—such as developing laboratory frameworks—rather than direct infrastructure investment,” said this official.

Queries emailed to spokespersons of India’s ministry of external affairs on 24 December, and Pharmexcil on 21 December remained unanswered till press time. Queries sent to the Afghanistan Embassy in New Delhi over email and WhatsApp on 22 December also went unanswered.

“The agenda of the meeting was to explore opportunities for importing Indian products, including herbal medicines, and encouraging partnerships with the Afghan healthcare system. The talks also touched on upgrading the technical capabilities of Afghan manufacturing facilities,” said the Indian government official.

“India has approved and implemented several key healthcare infrastructure projects in Afghanistan. These include the construction of five maternity and health clinics in the provinces of Paktia, Khost and Paktika, a 30-bed hospital in Kabul, and the construction or upgradation of major facilities such as an Oncology Centre, Trauma Centre, Diagnostic Centre and Thalassemia Centre in Kabul. Additional proposals for health sector support are currently under active consideration,” the Indian government said in an 18 December statement.

Zydus Lifesciences signed a $100 million memorandum of understanding with the Afghan National Procurement Authority (NPA) to supply essential and traditional remedies.

India is also a preferred destination for medical tourism for Afghan nationals. Of 600,000 patients who visited India for treatment in 2024, Afghan nationals accounted for 8% or 48,000, as per the Bureau of Immigration and Ministry of Tourism "India Tourism Data Compendium 2024.

Biswajit Dhar, professor of economics at Jawaharlal Nehru University, said that India is diversifying its export designations and that's a positive step.