India will be selective in accepting aid
The country is receiving overseas aid as it struggles to contain the second wave of its COVID-19 outbreak
India on April 30 received the first items of a USD100mn aid package from the United States, designed to help ease its deepening COVID-19 crisis. In recent years, it has refused foreign aid for disaster relief. In view of its worsening coronavirus outbreak, dozens of countries are now offering supplies such as medical oxygen and therapeutics.
What next
India will be selective about the countries from which it accepts aid. It will reject offers from China, for example, although it will be ready to step up procurement from its strategic rival. More broadly, it will be quick to dismiss suggestions of any formal policy shift on foreign aid, insisting that it is acting simply to plug short-term supply gaps.
Subsidiary Impacts
- Pharmaceutical imports from China will surge in the immediate term.
- As India continues to rein in vaccine exports, its South Asian neighbours will become more reliant on Chinese-made jabs.
- Delhi will refuse aid offers from long-standing enemy Islamabad.
Analysis
India's second wave of COVID-19 infections began in late February. Up to that point, it had registered just over 11 million cases.
On April 30, it recorded more than 400,000 new infections -- a pandemic record. Its case tally is now approaching 21 million, with over 226,000 related deaths.
20.7mn
India's COVID-19 case tallyThe official data may understate the actual toll.
Several factors have likely contributed to the current crisis, including:
- widespread laxity towards social distancing protocols;
- 'superspreader' events, such as election rallies and religious festivals; and
- highly infectious COVID-19 variants.
The last shipment abroad of locally made coronavirus jabs was on April 22 (see INDIA: Vaccine diplomacy brings money and influence - March 18, 2021). The pace of India's 'vaccine diplomacy' began to slow a few weeks earlier as the country came under pressure to speed up its own roll-out (see INDIA: Vaccine roll-out faces key obstacles - January 12, 2021).
Domestic manufacturers have not managed to scale up vaccine production at the rate they envisaged.
Earlier this year, the chief executive of the Pune-based Serum Institute of India (SII) warned that US export restrictions were causing a shortage of key raw materials. The SII makes the Oxford/AstraZeneca jab (marketed locally as 'Covishield'), the main shot that India has been exporting and administering domestically.
The Hyderabad-based Bharat Biotech (BB) makes 'Covaxin', the jab it developed in conjunction with the Indian Council of Medical Research.
To date, only about 130 million of India's 1.3 billion people have received a first vaccine dose, and around 30 million a second.
Hospitals around the country are reporting severe shortages of intensive care unit beds, medical oxygen and therapeutics for coronavirus patients. Several states have implemented lockdowns in a bid to curb their outbreaks.
India's needs
Prime Minister Narendra Modi's administration is counting on increased procurement as well as aid to ease the situation. It has established working groups to coordinate:
- government-to-government supplies;
- private sector aid and procurement; and
- aid from chambers of commerce and community associations.
India has tended to turn down disaster-related aid since the 2004 Indian Ocean earthquake and tsunami, although there is no fixed policy on the matter.
Its priorities right now are to secure:
- liquid oxygen, oxygen concentrators, and oxygen generation and transportation equipment;
- drugs such as Remdesivir, Tocilizumab and Favipiravir; and
- vaccines and vaccine raw materials.
The health ministry, the military and the Indian Red Cross Society are distributing supplies as they come in.
Aid
Several small countries have offered aid, citing India's earlier provision of vaccines.
Major Western powers and Russia will make more sizeable donations.
United States
Washington has pledged the most aid to Delhi out of more than 40 donor countries. Its recently announced package underscores the growing importance of the bilateral relationship to both sides (see PROSPECTS 2021: India - November 12, 2020). It goes some way to easing recent frictions over vaccine-making supply chains.
The initial delivery includes:
- 1,100 oxygen cylinders, 1,700 oxygen concentrators and several oxygen generation units;
- 15 million masks; and
- 1 million rapid diagnostic test kits.
The United States has redirected an order of AstraZeneca-making supplies to India. This should allow its partner to produce 20 million doses of the shot.
It will likely give India many of the 60 million AstraZeneca jabs it is making available.
United Kingdom and EU
The United Kingdom was among the first countries to send India aid. It has announced dispatch of 1,200 ventilators, 495 oxygen concentrators and three oxygen generation units.
EU members state have combined resources to provide supplies. Some of the largest pledges include 425 ventilators and 1,250 oxygen concentrators from Ireland, and eight oxygen generator plants from France.
Russia
Moscow has sent Delhi ventilators, oxygen concentrators and drugs including Favipiravir.
Procurement
India is rejecting offers of aid from China -- while accepting them from Taiwan -- but some of its largest pandemic-related procurements in recent weeks have been from Beijing.
Delhi and Beijing have long vied for regional influence. Bilateral relations have been especially strained for the last year because of a border stand-off in the western Himalayas. The two sides have only partially disengaged (see INDIA/CHINA: War may be avoided but distance will grow - June 23, 2020).
India will not accept aid from its rival until ties are normalised. However, it has asked Beijing to keep transport corridors open.
China is emerging as India's largest supplier of oxygen-generating equipment on a commercial basis. More than 60 cargo flights operated between China and India during a two-week period last month.
Sun Weidong, China's ambassador to India, tweeted that Chinese firms have supplied some 5,000 ventilators, over 21,000 oxygen generators, more than 21 million masks and roughly 3,800 tonnes of medicines to India since the start of April.
Private Indian companies have ordered up to 40,000 oxygen generators from Chinese firms.
Separately, Indian officials are negotiating with pharmaceutical firms in several countries to source Remdesivir. The US-based Gilead Sciences is donating 450,000 vials of the drug and active pharmaceutical ingredients to expand Indian manufacturing of it.
Wider approach
India will emphasise that it is not soliciting aid. It will consider offers on a case-by-case basis.
Meanwhile, it will try to step up domestic manufacturing of medical oxygen, drugs and vaccines.
Ramping up vaccine production will be a key priority
The SII was by January producing 70 million Covishield doses per month. It had planned to increase this to 100 million by March but will now look to reach that target by June.
Washington's redirecting of AstraZeneca-manufacturing supplies does little to help the SII's efforts to start making 'Covovax', a shot developed by the US-based Novavax. It wants the US government to ensure that India can receive supplies of the raw materials needed for this.
BB will aim to make 100 million Covaxin doses per month by September.
Separately, a handful of Indian manufacturers will shortly begin production of Russia's Sputnik V shot. India is also importing doses of the jab.
Since May 1, all Indians aged over 18 have been eligible for vaccination.
Domestic vaccine makers can now release up to half their supplies to state governments and private hospitals at a pre-set price. This has raised concerns about whether prices for vaccines will be pushed up, hindering access for poorer people.
