Impact on the MedTech Sector in India due to the Iran War

Abstract

Objective: This study evaluates the potential impact of an Iran-related geopolitical conflict, particularly disruptions to the
Strait of Hormuz, on India’s medical technology (MedTech) sector by examining its effects on imports, exports, supply chains,
logistics costs, and domestic manufacturing.
Methods: Monthly data covering January 2014 to January 2026 (145 observations) were compiled from UN Comtrade, the
U.S. Energy Information Administration (EIA), the Reserve Bank of India (RBI), the Ministry of Statistics and Programme
Implementation (MoSPI), and the Baltic Exchange. Two Ordinary Least Squares (OLS) regression models were estimated to
analyse the relationship between India’s MedTech imports and exports and five explanatory variables: global oil prices, USD/
INR exchange rate, GDP growth, freight cost index, and geopolitical sanctions. Four conflict-intensity scenarios (Baseline,
Low, Medium, and High) were simulated, followed by a 12-month forecast of trade flows under baseline and war conditions.
Results: The regression models demonstrate strong explanatory power (R² = 0.887 for imports and R² = 0.896 for exports).
Exchange rate depreciation and rising crude oil prices emerge as the dominant transmission channels through which
geopolitical conflict affects India’s MedTech trade. Under the High-Intensity conflict scenario, projected monthly MedTech
import expenditure increases from USD 619.87 million to USD 991.57 million, representing an increase of approximately
60%, primarily due to higher energy, logistics, and freight costs. The 12-month forecast estimates cumulative import losses
of approximately USD 797.5 million and export losses of approximately USD 149.8 million relative to the baseline scenario.
The study further identifies significant vulnerabilities across seven MedTech HSN categories arising from disruptions in
polymers, semiconductors, specialty metals, rare earth elements, and medical textile supply chains.
Conclusion: India’s MedTech sector remains highly vulnerable to geopolitical disruptions because of its dependence on
imported medical devices, components, and raw materials. Strengthening domestic manufacturing, diversifying supply sources,
establishing strategic inventories, improving foreign exchange risk management, and enhancing supply-chain resilience are
essential to reducing future geopolitical risks and ensuring uninterrupted access to critical healthcare technologies.