Geopolitical friction along the Afghanistan-Pakistan border has unexpectedly created a substantial commercial opening for India's pharmaceutical sector. With vital transit routes shut, India is stepping in to address acute medicine shortages in Taliban-ruled Afghanistan, potentially unlocking a $200 million opportunity for its generic drug manufacturers.
Trade Corridors Close, India Steps In
The genesis of this shift lies in the closure of two critical border crossings. In October 2025, Pakistan shut down the Torkham and Chaman transit points following violent military clashes with Afghan forces. This move, coupled with tensions over visa rules for transporters, choked the traditional supply routes for the land-locked nation, which relies heavily on Pakistan for access to seaports.
This disruption forced Kabul to urgently seek alternative suppliers, turning its gaze towards India. According to officials from the Pharmaceuticals Export Promotion Council of India (Pharmexcil) and government documents reviewed by Mint, high-level discussions were held in December to explore this new trade dynamic. The talks focused not just on exporting medicines but also on India extending technical help to set up laboratories and upgrade Afghan manufacturing facilities.
A Strategic and Humanitarian Engagement
India's approach is being carefully calibrated. A senior Pharmexcil executive, speaking anonymously, stated that India is "evaluating the synergy" with Afghanistan. "With certain regional trade corridors closing, a $200 million opportunity has emerged for Indian generics to fill the gap," the executive said. This is framed as a people-centric initiative that allows India to remain a key regional stakeholder by fulfilling humanitarian needs while adhering to government policy.
The numbers underscore the growing relationship. India's total pharma exports stood at $30.46 billion in the financial year ending March 31, 2025. Exports to Afghanistan accounted for $108 million, or 0.39% of the total, marking a 20% increase from the previous year. Pharmexcil attributes this growth to high demand for affordable Indian generics as traditional supply lines falter.
However, India maintains a discreet stance. A second government official explained this caution stems from the lack of formal international recognition for the Taliban regime, which seized power in August 2021. "Given the absence of a recognized government to provide financial guarantees, the risk of capital loss remains a primary concern," the official noted. Consequently, engagement currently emphasizes technical support over direct large-scale infrastructure investment.
High-Level Visits and Concrete Projects
This commercial diplomacy is playing out alongside a series of high-level Afghan visits to New Delhi. Key figures like Foreign Minister Mawlawi Amir Khan Muttaqi and Public Health Minister Mawlawi Noor Jalal Jalali have held meetings with Indian counterparts. Jalali's discussions with Union Health Minister Jagat Prakash Nadda centered on importing Indian products, including herbal medicines, and forging healthcare partnerships.
India's commitment extends beyond trade. A government statement from 18 December outlined several approved healthcare infrastructure projects in Afghanistan, including:
- Construction of five maternity and health clinics in Paktia, Khost, and Paktika provinces.
- A 30-bed hospital in Kabul.
- Construction or upgradation of major facilities like an Oncology Centre, Trauma Centre, Diagnostic Centre, and Thalassemia Centre in Kabul.
On the commercial front, Zydus Lifesciences has signed a $100 million memorandum of understanding with the Afghan National Procurement Authority (NPA) to supply essential and traditional remedies. Furthermore, India remains a preferred destination for Afghan medical tourists. In 2024, 48,000 Afghan nationals (8% of all medical tourists) travelled to India for treatment.
Economist Biswajit Dhar from Jawaharlal Nehru University views this as a positive strategic move. He notes that India is effectively diversifying its export destinations, strengthening its economic and geopolitical footprint in a region of critical importance, all while addressing a pressing humanitarian need.
