Unpacking India's Vaccine Diplomacy
Plus, all eyes on India's upcoming Budget
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India’s Kicks Off A Vaccine Diplomacy Campaign
Merely days after India began its national campaign to vaccinate its population in its fight against the COVID-19 pandemic, India announced that it will begin sending doses of vaccines to several neighboring and partner countries as part of its #VaccineMaitri or #VaccineDiplomacy initiative.
On January 19, the Ministry of External Affairs announced that:
The Government of India has received several requests for the supply of Indian manufactured vaccines from neighbouring and key partner countries. In response to these requests, and in keeping with India’s stated commitment to use India’s vaccine production and delivery capacity to help all of humanity fight the Covid pandemic, supplies under grant assistance to Bhutan, Maldives, Bangladesh, Nepal, Myanmar and Seychelles will begin from 20 January 2021. In respect of Sri Lanka, Afghanistan and Mauritius, we are awaiting their confirmation of necessary regulatory clearances.
On Wednesday itself, India shipped out and gifted 250,000 doses of vaccines (according to The Washington Post, India has been shipping the Indian version of the Oxford-AstraZeneca vaccine produced by the Serum Institute of India, Covishield) to Bhutan, which received 150,000 doses, and Maldives, which received 100,000 doses.
Since Friday, already-delivered gift shipments of vaccine have included:
1 million doses to Nepal
2 million doses to Bangladesh
1.5 million doses to Myanmar
50,000 doses to Seychelles
100,000 doses to Mauritius
In India’s extended neighborhood, which have been prioritized in India’s delivery of free doses, three countries remain: Sri Lanka, Afghanistan, and Pakistan. Sri Lanka is slated to receive 500,000 doses of the vaccine at some point this coming week. There is little information so far on when or how many doses India will send to Afghanistan. On Pakistan, it seems the little appetite either country shares for diplomacy will continue on vaccine diplomacy too, with Indian government sources reportedly telling The Washington Post “We’ll cross that bridge when we come to it” and Pakistani officials issuing no comment.
Beyond India’s free doses of vaccine, India has also begun exporting its vaccine as a commercial supplier. Brazil and Morocco have already received 2 million doses each of the vaccine, while Bangladesh and Myanmar are slated to receive 3 million additional doses each as a commercial shipment at some point in the coming weeks. South Africa will receive 15 million doses - 10 million this coming week, and 5 million the week after. India is also looking to ramp up its commercial exports of vaccines to Oman, Saudi Arabia, Bahrain, and Mongolia.
India was always going to play a vital role in providing vaccines for many developing countries, serving as the “world’s pharmacist.” Moreover, India also maintains commitments to this goal, having joined the global vaccine coalition COVAX to ensure a steady supply of vaccines to developing countries. However, India’s choice of countries in the start of its #VaccineMaitri campaign reveals some important priorities for its wider foreign policy.
India’s focus on the neighborhood and the Indian Ocean Region stems from its desire to regain or maintain favor with countries in its periphery. Vaccine shipments can not only help in solidifying relations with Bangladesh, Maldives, and Bhutan, but also foster stronger ties with neighbors that India has experienced rockier relations with in recent years, such as with Nepal following the ongoing boundary dispute in the Kalapani region. Moreover, Vaccine shipments to Seychelles and Mauritius, key island states in the Indian Ocean, can serve India’s broader interests in pushing back against China’s attempts to play a bigger role in what India traditionally regards as its strategic backyard. Indeed, China has made no secret of the fact that it plans to use its own vaccines as tools in its foreign policy, combining its vaccine export strategy to its signature foreign policy initiative in the 21st Century to launch the “Health Silk Road” to position itself as a global leader in the post-COVID world.
However, India also needs to remain cognizant of the limits of such vaccine diplomacy.
Firstly, while India has scored some victories with neighboring countries at least vis-à-vis China (China’s Sinopharm vaccine continues to await regulatory approval in Nepal, and its effort to provide free vaccines to Bangladesh has run into problems), the delivery of vaccines will not erase the setbacks India has faced within its neighborhood. Secondly, part of India’s success comes from the fact that there is a deep-seated trust in India’s manufacturing process when it comes to vaccines, and an appreciation of India’s transparency on the efficacy of vaccines. For example, China’s lack of transparency on the efficacy data of its own vaccines saw Brazil shift away from Chinese vaccines in favor of Indian ones. However, India’s attempts to fast-track the Bharat Biotech vaccine when Phase III trials are still ongoing can undermine that trust and faith in an area where India faces a relative comparative advantage to China.
Finally, beyond the China factor, India finds itself in a unique position - a developing country in a position to be a truly responsible stakeholder for other developing countries and provide them with a path out of the pandemic through vaccines. India has played to its strengths to showcase how it can use this unique position for good. As India maintains its longer-term goal of playing a bigger role in global affairs in the 21st Century, it should continue its #VaccineMaitri campaign guided by a desire to demonstrate its ability to play a constructive role in helping countries manage the transition into a post-COVID world.
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COVID-19 Vaccination Update
On January 16, India launched it campaign to vaccinate its population against the virus that causes COVID-19.
In the first two days - Saturday, January 16 and Sunday, January 17 - India vaccinated a total of 208,253 people (191,181 people on the 16th, and 17,072 people on the 17th).
This week, beginning on Monday, January 18 and ending on Sunday, January 24, the total number of vaccinated people grew to 1,613,667 people. The breakdown of how many people were vaccinated each is included below. The data below also links directly to the original data released by the government, which includes a further state-by-state breakdown.
Monday, January 18: 148,266 beneficiaries
Tuesday, January 19: 177,368 beneficiaries
Wednesday, January 20: 112,007 beneficiaries
Thursday, January 21: 192,581 beneficiaries
Friday, January 22: 228,563 beneficiaries
Saturday, January 23: 146,598 beneficiaries
Sunday: January 24: 31,466 beneficiaries
If you are like me and starting doing the math, you’d find that the daily numbers would actually leave 368,565 beneficiaries unaccounted for. The explanation for that is that the numbers above only represent the data available at time of upload (usually between 5pm and 7:30pm), and is therefore provisional.
I have, so far, been unable to find the final data of the number of people vaccinated per day. However, if you happen to know where that final data is, please do feel free to share and I can start to include that in future weeks!
All Eyes on India’s Upcoming Budget 2021
As we inch closer to the end of January, there is been growing interest and public discussion on what India’s Budget - set be unveiled on February 1 - will include. This year’s budget faces greater scrutiny, particularly given the implications it will have on the trajectory of India’s post-COVID-19 recovery.
As it puts the finishing touches, the government will need to balance its policy priorities across numerous competing interests. In very simple terms, these competing interests will center on two key issues: managing revenues and generating demand.
For one, the government will need to shore up its revenues, recognizing that the slump in business resulting from the lockdown and the additional expenditure required to stimulate the economy has spread its resources thin. With the start of the vaccine campaign and a border crisis still simmering with China, the government continues to face significant expenditures ahead, and the government will need to ensure it has a steady stream of revenues to avoid a dramatic expansion in its fiscal deficit.
At the same time, the government will also need to grapple with the fact that the easiest way to shore up revenues - through taxes, cesses, and other duties - may not be the most effective at this time. The pandemic has taken a toll on India’s middle class and businesses, who are now clamoring for relief. The government will need to balance its desire for revenue stability with the need to stimulate the economy further, leaving enough within the hands of Indian taxpayers that they contribute to the recovery of the economy spend or invest their funds to create demand.
Some indications of what how the Budget will try and maintain that balance have started to be leaked to the media. Aftab Ahmed and Manoj Kumar at Reuters report that India will continue increasing custom duties on goods India imports from abroad across a number of product lines. Since at least the 2018 Budget presentation, India has been steadily increasing such custom duties on products where it seeks to protect domestic industries from foreign competition. Ahmed and Kumar report that, in this case:
India is considering hiking import duties by 5%-10% on more than 50 items including smartphones, electronic components and appliances in the upcoming budget… the government was seeking to target additional revenue of about 200 billion to 210 billion rupees ($2.7 billion to $2.8 billion) from the moves, as it looks to shore up revenue amidst the pandemic-driven slowdown that has stung the economy.
Two of the government sources also said the duty hikes could impact furniture and electric vehicles, potentially hurting the likes of Swedish furniture maker Ikea and Tesla, which is planning to launch its cars in India this year.
Anulekha Ray at Livemint, citing experts, predicts that there may be a Covid cess in the 2-4% range levied on those belonging to higher income groups. Others are preemptively arguing to keep the corporate tax cut that the government passed in September 2019, lowering the effective corporate tax rate to 25.17% for domestic companies, suggesting instead that the government proceed with disinvesting its shares in public sector units (PSUs) as a way of raising funds to bridge any shortfalls and keep the fiscal deficit in check. Others still have issued their wishlist for what they would like to see in the budget, from extending tax holidays for start-ups, to increased government support to the construction and infrastructure development sectors to foster job creation, to deductions on interest paid for affordable housing loans.
Finance Minister Nirmala Sitharaman has said that she would like to prepare a Budget “like never before” for FY2021-2022. With only days to go until February 1st, all eyes are on India’s Budget.
Further Reading
Zico Dasgupta, Assistant Professor of Economics at Azim Premji University - The impossible trinity facing Budget 2021-22
Jayati Ghosh, Professor of Economics at the University of Massachusetts, Amherst - Two Key Numbers to Look Out for in the Upcoming Budget 2021
A Prasanna, Head of Research at ICICI Securities PD and Tadit Kundu, Economist at ICICI Securities PD - Balancing fiscal responsibility, austerity
Manavi Kapur, reporter at Quartz - Why India’s budget 2021 must seriously amp up healthcare spending
Center for Policy Research and The Accountability Initative - Budget 2021 Briefs
News Roundup
Following the Supreme Court of India’s order suspending the implementation of three bills passed by the Indian Parliament in September 2020 aimed at reforming India’s agriculture sector, the Union Minister for Agriculture and Farmer’s Welfare announced that the government was ready to keep the three farm laws suspended for a period of 1 year to 1.5 years, during which the government would engage in mutual dialogue with protesting farmers and aim to reach a solution that addresses their demand.
A delegation of the Indian Army, led by Lt. Gen. P.G.K Menon, commander of the Leh-based 14 Corps, met with their counterparts from the People’s Liberation Army of China for the 9th round of military talks regarding the tensions along the Line of Actual Control.
The last round of talks were held on November 8, 2020.
The talks come as Shiv Aroor, journalist at India Today, reports that the Chinese army has violated a crucial confidence building measure in place since September, and which was proposed by the Chinese themselves.
Aroor reports that “The Chinese Army has consolidated its positions in eastern Ladakh and quietly, gradually increased troop numbers at the friction points along the Line of Actual Control (LAC) despite specifically proposing four months ago that the two sides should refrain from sending more troops to the troubled front.”
The result is that “despite the deep winter chill, opposing troops, tanks and armoured personnel carriers are nearer to each other than they have been in the past four months.”
The Cabinet approved a Memorandum of Understanding between India’s National Institute of Solar Energy and Uzbekistan’s International Solar Energy Institute to promote cooperation in the fields of solar energy.
The Indian Air Force and the French Air and Space Force took part in a first-of-its-kind bilateral exercise named “Desert Knight” from January 20-24, 2021. The exercise saw both air forces deploy French-made Rafale aircraft for the first time, deploying them in “realistic settings with an aim to enhance operational capabilities and interoperability.”
NITI Aayog, the government’s in-house policy think tank, and the Institute for Competitiveness released the Second Edition of the “India Innovation Index,” which ranks Indian States and Union Territories on their innovation capabilities. Delhi took the first place, with a score of 46.60. The full breakdown of rankings is available here.
India and Singapore held the fifth round of their Defense Ministers’ Dialogue on January 20, 2021. The dialogue saw the signing of the “Implementing Agreement on Submarine Rescue Support and Cooperation” between the Indian Navy and the Republic of Singapore Navy, as well the announcement of new initiatives to deepen cooperation in the area Humanitarian Assistance and Disaster Relief between both armed forces. The full joint statement released after the meeting is available here.
The European Union Commission and India’s Department for Promotion of Industry and Internal Trade held their first ever dialogue on Intellectual Property Rights on January 14, 2021.
The U.S. Navy hosted members from the Royal Australian Air Force, Canadian Air Force, Indian Navy, and Japan Maritime Self-Defense Force at the Andersen Air Force Base in Guam for Exercise Sea Dragon 2021. The exercise, which centers on anti-submarine warfare training, which included finding and tracking the USS Chicago, a U.S. Navy Los Angeles class nuclear submarine.
The European Union and India’s Ministry of External Affairs held their first ever Maritime Security Dialogue on January 20, 2021.
Five to Read
From cogent analysis to potentially big news that you should keep an eye on, here are a few commentaries and other pieces of writing that I found particularly enlightening:
Amb. Vijay Gokhale, non-resident Senior Fellow at Carnegie India and former Foreign Secretary of India, writes: “With China’s near-permanent presence in the Indian Ocean likely in this decade, and the growing rivalry with America, India has no choice but to pro-actively try to shape the future of the Indian Ocean in its favour. This can be done, provided that we invest in developing both military and legal expertise in order to create a multilateral framework that maintains India’s supremacy in the Indian Ocean as it once again becomes the centre of the world’s stage.”
Jyoti Malhotra, National & Strategic Affairs editor at ThePrint, argues: “The Doha negotiations between the Taliban and the Afghan government are going terribly slow. All sides are waiting to see what the Joe Biden-Kamala Harris administration’s foreign policy priorities will be — one Biden adviser admitted, it would be “China. China. China. Russia.”That, certainly, would be a mistake. Ignoring the Af-Pak region will mean giving Pakistan a long rope. But if the Biden lot are willing to reach out to neighbours like Iran and India and put their concerns around Russia on the back burner, the fightback against the Taliban would not just mean giving peace a chance in Afghanistan. It would mean cutting down the ISI and encouraging a political dispensation to take real control in Pakistan. It would mean asking the Chinese, their rivals anywhere else in the world, to tell their client state, Pakistan, to fall in line. It would mean reshaping the geopolitics of South Asia.”
Benjamin Parkin, the Mumbai correspondent for the Financial Times, writes: Retail inflation remained above the Reserve Bank of India’s mandated target of 6 per cent for eight months from April, soon after the country entered a months-long lockdown. It touched a six-year high of 7.6 per cent in October. The consumer price index finally fell within the RBI’s target at 4.6 per cent in December, thanks partly to a drop in vegetable prices, providing some respite to low-income shoppers struggling to fill shopping bags and politicians fearful of popular outrage. But economists have warned that India, which for years has struggled with runaway price increases, must balance the urgent need to revive growth with keeping food, transport and commodities prices under control.
Dr. Sana Hashmi, visiting fellow at National Chengchi University’s Institute of International Relations, argues: “Even though Taiwan launched its southbound policy in 2016, the potential of Taiwan-India engagement remains underutilized. It is crucial to identify what is obstructing greater momentum in bilateral relations, and what could be done to remove the hurdles. First, India is sticking to its decades-old “one China” policy, so it is implausible to push for that decision to change. Although India has never included Taiwan in its acknowledgement of the policy — in written form at least — and since 2010 has stopped mentioning the policy in joint statements and other official documents, its adherence remains unmoved. However, there is a need to explore suitable and effective alternatives so that the “one China” policy does not obstruct the path to a higher degree of India-Taiwan partnership.”
Dr. C. Raja Mohan, the director of Institute of South Asian Studies, National University of Singapore, writes: “The Trump years have seen two important developments in India-US relations. One is the sharpening tensions on trade and the other is the deepening defence and security cooperation. The Biden moment offers the opportunity for Delhi to overcome the bilateral differences on trade and elevate defence cooperation to a higher level. India’s own attitudes to trade and globalisation have evolved under Prime Minister Narendra Modi. A pragmatic international orientation to the Atmanirbhar strategy could open some space for working with Biden on reforming the global trading system and make it more politically sustainable. An America that moves towards doing less on the global security front will need strong partners like India who can contribute more. A political understanding on strategic burden-sharing would help Delhi and Washington develop deeper military cooperation and more intensive diplomatic coordination in the Indo-Pacific.”