Environmental risk assessment (ERA) plays a pivotal role in the pharmaceutical industry by identifying and mitigating the potential adverse impacts of pharmaceutical contaminants on human health and the environment. This paper reviews the global frameworks, methodologies and applications of ERA, focusing on the 2024 European Union (EU) ERA guidelines and United State Food and Drugs Administrations (USFDA) approaches Centre for Biologics (CBER and CDER). It outlines key processes such as contaminant fate and transport, exposure assessment, toxicology and risk characterization, supported by chemical properties like solubility, vapor pressure, Koc and Kow that influence environmental behaviour. The study emphasizes the importance of multimedia fate models and environmental monitoring across compartments (air, water, soil and sediment) to assess ecological risks. Tiered ERA strategies, including quantitative (Q-ERA) and qualitative (Qual-ERA) assessments, guide the management of Active Pharmaceutical Ingredients (APIs), especially those with high toxicity, persistence and bioaccumulation potential. The Indian pharmaceutical sector, while progressing, requires stronger integration of PNEC-based evaluations, advanced water treatment technologies and green chemistry principles. Recommendations include enhancing site-specific effluent assessments, API prioritization, staff training and documentation to align with global sustainability standards. By adopting these best practices, the industry can reduce its environmental footprint and contribute to long-term ecological and public health protection.