The prolonged political crisis in Ukraine could have a bearing on the domestic pharmaceutical companies based there, according to a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).

While the recent developments in Ukraine have had no immediate impact on the businesses of leading Indian pharmaceutical companies based in Ukraine, it is felt that if the situation continues, it could have a bearing on the country’s exchange rate, which would make the landed cost of Indian pharmaceuticals higher, the survey said.

Ukraine is India’s second largest trading partner in the Commonwealth of Independent States after Russia. In 2012-13, India’s total trade with Ukraine was $3.18 billion. Exports of pharmaceuticals from India were $154 million in 2012-13, which is about 30 per cent of India’s total exports to Ukraine.

“The troubled region of Crimea has traditionally accounted for just about 5-6 per cent of the sales of the leading Indian pharmaceutical companies, and is not a large market. However, there have been reasons for concern over a likely impact on the pharmaceutical companies, largely due to a recent devaluation of the local currency (Hryvnia) against the dollar,” FICCI said.

Though industry has staved off the immediate fallout of the crisis in Ukraine, it is worried that if the trend continues, the price of imported products in Ukraine will become expensive. The higher landed cost will ultimately affect the end-consumer.

While it is still early to say whether the recent turn of events would impact pharmaceutical sales in the medium to long term, industry is taking comfort from the absence of any threat in the short run, it said.

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