Middle East Tensions Drive Up Costs for India’s Medical Devices Sector
New Delhi, March 23, 2026: Escalating geopolitical tensions in the Middle East and disruptions linked to the Strait of Hormuz have significantly increased input costs for India’s medical devices industry, raising concerns over long-term supply stability and pricing pressures.
Industry representatives report that the cost of critical raw materials – particularly specialized plastics – has surged by nearly 50%, while packaging expenses have risen by over 20%. Energy costs have also escalated sharply, with diesel-powered operations becoming more expensive and gas prices from Adani Total Gas Ltd nearly doubling, alongside reduced availability.
These increases are placing strain on manufacturers of essential medical supplies such as syringes, nitrile gloves, catheters, and other disposable plastic devices. The sector, known for its thin margins and high-volume operations, is finding it increasingly difficult to absorb the rising costs.
No Shortages Yet, But Warning Signs Emerge
Despite mounting pressures, industry leaders emphasize that there is currently no shortage of key medical disposables in the market.
“There are no shortages of syringes or other medical disposables at present, and there is no need for panic,” said Rajiv Nath, Forum Coordinator at Association of Indian Medical Device Industry (AIMED). He noted that while supplies remain stable, manufacturers are facing longer lead times, elevated freight costs, and significant pricing pressures.
According to Nath, companies have already increased product prices by 10–20% to sustain operations. Key polymer materials such as polypropylene, HDPE, and LDPE remain available, but evolving global supply chain dynamics require close monitoring.
Short-term shipment delays of one to three weeks have so far been managed through inventory buffers. However, prolonged disruptions could lead to production slowdowns, hospital supply constraints, and further cost escalations – particularly if raw material markets see opportunistic pricing behaviour.
Import Dependence Remains a Structural Challenge
The situation has also highlighted India’s continued reliance on imports for high-grade, specialized polymers that meet stringent regulatory standards. Industry experts warn that this dependency could amplify risks if global supply chains face extended disruptions.
Industry Seeks Government Intervention
Amid rising pressures, the industry has called for urgent government support to protect operations, employment, and healthcare affordability. The sector estimates that over 500,000 jobs could be at risk if disruptions persist.
Key demands include allowing relief from government tender obligations under force majeure and addressing liquidity constraints faced by manufacturers.
Industry stakeholders have urged the government to ensure that Container Corporation of India (CONCOR) maintains reasonable inland freight charges without opportunistic increases. They have also called for faster GST refund processing to ease working capital stress.
Manufacturers are currently grappling with an inverted duty structure, where they pay 18% GST on inputs but can only charge 5% on finished products, leading to significant accumulation of unutilized tax credits and increased borrowing.
Targeted Relief Measures Proposed
Rather than reducing import duties on finished medical devices, industry leaders have recommended targeted, temporary relief measures. These include a three-month rebate of 2.5% on raw material imports and 5% on component imports under relevant classifications.
Such steps, they argue, would help stabilize production costs, maintain export competitiveness in key markets like the US and EU, and support the government’s Atmanirbhar Bharat initiative.
While the situation remains under control for now, industry stakeholders caution that sustained geopolitical instability could test the resilience of India’s medical devices supply chain in the coming months.
