Blocked Payments
Sept. 14, 2024, 6:47 a.m.
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Blocked Payments, Lost Shipments: Bangladesh Unrest Disrupts Indian Pharma & Medical Tourism

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The ongoing political turmoil in Bangladesh has caused widespread disruptions across various industries, but Indian pharmaceutical exporters and medical tourism providers have been hit particularly hard. Indian pharmaceutical companies are grappling with blocked payments, lost shipments, and communication breakdowns with importers, while medical tourism has taken a significant hit due to patients cancelling or postponing their treatments in India. These challenges, along with a degree of uncertainty about when normalcy will resume, have left both sectors in a precarious situation.

1. Pharma Exports: Facing Multiple Obstacles

The Indian pharmaceutical industry, which plays a crucial role in exporting medicines and pharmaceutical ingredients to Bangladesh, has encountered substantial difficulties due to the unrest. The Pharmaceuticals Export Promotion Council of India (Pharmexcil), under the Ministry of Commerce and Industry, reported that Indian exporters are now hesitant to send their products to Bangladesh, fearing unpaid dues and financial instability.

According to Raja Bhanu, director general of Pharmexcil, the industry's main concerns stem from unpaid dues, as well as logistical complications. "The Indian Pharmaceutical industry, which exports drugs and intermediates, is facing significant challenges, including unpaid dues and concerns about financial stability due to the political unrest in Bangladesh," Bhanu said.

One of the major issues faced by exporters is the logistical nightmare at the shared border between India and Bangladesh, where shipments are getting stuck and insurance concerns make matters worse. Although conditions are reportedly improving, the instability has already caused considerable financial strain on exporters.

2. Bangladesh: A Key Market for Indian Pharma

Bangladesh is a significant market for Indian pharmaceuticals, sourcing approximately 30% of its pharmaceutical ingredients from India. This makes the current disruption even more troubling for Indian firms, especially small and medium-sized businesses that rely heavily on this trade.

Government data indicates that after a promising start to the financial year 2024-25, with exports rising 42.48% from April to May, growth tapered off in June with only a modest 5.66% increase. This deceleration points to a slowdown in momentum despite earlier gains.

Several pharmaceutical companies have remained silent on the issue, either declining to comment or requesting anonymity. A Mumbai-based drug manufacturer admitted that they had stopped accepting new orders until the situation in Bangladesh stabilizes. "We still haven’t recovered lost shipments that went missing during the clashes," said the company, underlining the severity of the current disruptions.

3. Medical Tourism: A Vital Lifeline Cut Off

India has long been a favored destination for Bangladeshi patients seeking medical treatment due to its high-quality healthcare and affordability. However, the ongoing unrest in Bangladesh has severely affected the flow of patients. Many have had to cancel or delay critical medical procedures, impacting both the patients and the Indian healthcare industry.

Rajeev Taneja, CEO of Global Care, a medical value travel company, emphasized the gravity of the situation. "Bangladesh contributed over 50% of our international medical visitors in 2023, and the current decline in patient visits — up to 50% in some cases — is deeply concerning," Taneja said.

Another medical travel company, MediJourn, echoed similar concerns. Co-founder Ishaan Dodhiwala noted that while the situation is challenging, there is optimism that patient flow will improve as the visa situation stabilizes. "We are hopeful that with the Indian visa application centre in Bangladesh resuming operations, patients will be able to resume their treatment plans soon," he said.

Conclusion: A Hope for Recovery Amid Uncertainty

While there are tentative signs of improvement, the future remains uncertain for Indian pharmaceutical exporters and medical tourism providers. The disruptions have exposed the vulnerabilities in cross-border trade and healthcare services, leaving many companies in a holding pattern. As the situation in Bangladesh slowly stabilizes, both industries are cautiously optimistic that normalcy will soon return, allowing business to recover and patients to receive the care they need.



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