Why Are India's States Running Out of Vaccines?
Several states and Union Territories announced this week they were facing shortages of vaccines.
Hi there, I’m Aman Thakker. Welcome to Indialogue, a newsletter analyzing the biggest policy developments in India. The aim of this newsletter is to provide you with quality analysis every week on what’s going on in India.
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Why Are India's States Running Out of Vaccines?
On May 1, 2021, India announced that it would make everyone above the age of 18 eligible to receive a COVID-19 vaccine. However, to inoculate the nearly 800 million people that fall under this category, the central government announced a new approach, as I outlined in an earlier edition of Indialogue:
Under the new vaccine policy, the center would receive only 50% of vaccines manufactured to be used to inoculate those over 45, health care workers and frontline workers. Meanwhile, India’s states can negotiate acquisitions of the remaining 50% of the vaccines with the manufacturers to vaccine the 18-45 year old group of the population.
However, this new approach has run into problems less than two weeks after it went into effect. On May 14, the state governments of Maharashtra and Karnataka announced they would temporarily pause all vaccinations for those aged 18-44 due to a shortage of vaccine stocks, and a need to prioritize second doses for those who have already received their first dose. In Delhi, leaders from the Aam Aadmi Party, which is in power in the Union Territory, announced that “We have run out of Covaxin stock for 18-44 age group and will have to shut 125 centres where it is being administered after Tuesday (May 11) evening.”
In Telangana, the situation is worse: the state has not even begun administering doses to those between the age of 18-44, and announced that the state, “in view of inadequate stock of Covaxin and non-receipt of fresh stocks from the Ministry of Health and Family Welfare,” it would postpone giving second doses for persons above 45 years of age who have already received their first dose.
The result has been that India’s daily rate of vaccinations - which, at its peak, was at more than 4 million doses per day - has dipped to less than 2 million doses per day.
Why is this happening? There are several factors at play.
First, India’s states had incredibly limited notice to craft its plans to vaccinate the 18-44 population. The central government announced that states are solely responsible for the procurement and administration of COVID-19 vaccines for the 18-44 age group on April 19, giving the states only 11 days to prepare.
Second, while the central government said that states could negotiate individual procurement agreements with vaccine manufacturers for 50% of the total doses produced, there were still some limitations on how much the states could get. As Azman Usmani of BloombergQuint notes:
The April 19 policy suggested states were free to book doses within the overall 50% quota, based on their individual needs and pace of vaccination. But, in reality the centre has placed two more restrictions on them, as was revealed only when the Supreme Court asked the Modi government to share policy details.
1. The centre has limited each state’s direct procurement based on population.
2. That procurement is further to be shared 50% with the private sector in that state.
Third, last week saw a severe slowdown in vaccine allocations from the center to the states on vaccines for those above the age of 45. While the center sent 5.3 million and 4.6 million doses of the vaccine to states on May 8 and May 9 respectively, those numbers fell dramatically to 900,000 and 700,000 on May 10 and May 11 respectively. As a result, many of India’s states had to divert the vaccines they had acquired to vaccinate those between the ages of 18-44 to ensure there were enough second doses for those above the age of 45.
What all of this has meant is a fractured, inequitable, and largely broken procurement system of vaccines for the large segment of India’s population that is aged 18-44.
By putting states in charge of vaccinating the population aged 18-44, India’s central government has added 36 additional entities (India’s 28 states and 8 Union Territories) to the market to procure vaccines, thereby allowing vaccine manufacturers to play states off against each other as they face to acquire vaccines, giving these manufacturers a a significant amount of leverage.
Moreover, the limited notice of 11 days before this policy went into place meant that most states had very little time to negotiate prices, much less build up their own stockpiles of vaccines. Some states publicly noted that they were told by vaccine manufacturers that acquiring doses would be difficult since the manufacturers were still fulfilling orders from the central government.
Finally, the central government’s decision to place orders for only a limited number of vaccine doses - between January and May 2021, the central government only purchased a total of 350 million doses of Covishield and Covaxin, not even enough to vaccinate 20% of the country's population - has meant that whatever small amount of doses the states were able to procure to vaccinate the population aged 18-44 had to be diverted to ensure that there were enough second doses for those who had already received one shot.
In short:
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News Roundup
Prime Minister Modi chaired a high-level meeting with Indian government officials to review India’s response to the severe second wave of COVID-19 infections, and India’s vaccination campaign. Issues such as ensuring adequate oxygen supply (particularly in rural areas), scaling up testing, and ensuring supply of ventilators to hospitals and patients that need it, and ramping up vaccination rates remain central. However, there were no major announcements or policy changes following the meeting.
The Cabinet approved a proposal by Department of Heavy Industry to implement a Production Linked Incentive Scheme for “Advanced Chemistry Cell” (ACC) Battery Storage. Under this scheme, India would expand its manufacturing capacity of 50 Gigawatt hours of ACC storage and 5 Gigawatt hours of "niche" ACC storage. The scheme will last for a period of five years, with an initial financial outlay of Rs. 18,100 crore ($2.47 billion).
In a United Nations debate on the ongoing Israeli-Palestinian conflict, India’s Permanent Representative and Ambassador to the United Nations in New York T.S. Tirumurti stated that India’s position was “urge both sides to show extreme restraint, desist from actions that exacerbate tensions, and refrain from attempts to unilaterally change the existing status-quo, including in East Jerusalem and its neighbourhood.” He stated that “the indiscriminate rocket firings from Gaza targeting the civilian population in Israel, which we condemn, and the retaliatory strikes into Gaza, have caused immense suffering and resulted in deaths, including women and children,” and reiterated “India’s strong support to the just Palestinian cause and its unwavering commitment to the two-State solution.” The full statement from Amb. Tirumurti is available here.
Dr. Shahid Jameel, a senior Indian virologist, resigned from his role as chair of the Indian SARS-CoV-2 Genomic Consortia (INSACOG). His resignation came days after criticizing the government’s response to India’s COVID-19 crisis in The New York Times, writing that scientists “are facing stubborn resistance to evidence-based policymaking.”
India’s Ministry of Power, in a letter to top energy bureaucrats of each of India’s states and Union Territories, chastised the State Electricity Regulatory Commissions of three states - Maharashtra, Himachal Pradesh, and Kerala - for not issuing tariff orders under Sections 61, 62, and 64 of India’s Electricity Act, 2003. You can read the complete letter here.
India’s Ministry of Health and Family Welfare announced on May 13, 2021, that it would increase the gap between the first and second doses of the Covishield (or Oxford-AstraZeneca) vaccine from 6-8 weeks to 12-16 weeks.
India’s Minister for Commerce and Industry, Piyush Goyal, held a virtual meeting with the U.S. Trade Representative Ambassador Katherine Tai, on May 14, 2021. The two officials discussing increasing global vaccine availability, India’s proposal of India on waiver of certain TRIPS provisions for vaccines, and ensuring a need to keep supply chains for vaccines “open and unbridled.”
The Securities and Exchanges Board of India (SEBI) released a new consultation paper as part of its review of regulations related to “promoter, promoter group and group companies,” including changes such as reducing the lock-in time for the stockholdings of promoters after a public issue, and a tightening of what the definition of what a “promoter” is. The consultation paper is open to comments and feedback from the public until June 10, 2021. The full consultation paper is available here.
A Brief Self-Promotional Interlude
I’m excited to share my latest article, published last week in Foreign Policy. The piece looks at the U.S. engagement with India since President Joe Biden took office and outline steps both countries can take to boost their partnership. In it, I argue:
When U.S. President Joe Biden took office, he made clear he would prioritize domestic challenges, particularly the fallout of the coronavirus pandemic. Nevertheless, his administration has advanced at least some of its foreign-policy goals, including strengthening ties between the United States and India. As Washington and New Delhi look to deepen collaboration, Biden’s first 100 days present important lessons for how both countries can enhance their partnership—from positive momentum on climate change to the delayed U.S. response to India’s COVID-19 crisis.
You can read the full piece here. And as always, please do email me any feedback or suggestions you have.
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:
Dr. Shahid Jameel, virologist and director of the Trivedi School of Biosciences at Ashoka University in Sonipat, India, writes: “As of Tuesday, India had over 23 million reported cases of Covid-19 and more than 254,000 deaths. The real numbers may be much higher, as the country reported an average of more than 380,000 new cases per day in the past week. As a virologist, I have closely followed the outbreak and vaccine development over the past year. I also chair the Scientific Advisory Group for the Indian SARS-CoV2 Consortium on Genomics, set up by the Indian government in January as a grouping of national laboratories that use genetic sequencing to track the emergence and circulation of viral variants. My observations are that more infectious variants have been spreading, and to mitigate future waves, India should vaccinate with far more than the two million daily doses now.”
Lisa Curtis, senior fellow and director, Indo-Pacific Security Program, Center for a New American Security, argues: “As China gains ground in a global competition across the military, economic, diplomatic, and technological domains, the Quadrilateral Security Dialogue (Quad) made up of Australia, India, Japan, and the United States (US) is finally finding its footing. The extent to which Quad countries can collaborate across all four domains will determine whether China’s designs on the Indo-Pacific will succeed… However, the first order of Quad business is assisting India as it grapples with a ferocious second wave of the coronavirus pandemic. India’s priority is taking care of its sick and getting its population vaccinated as soon as possible. Quad countries — and all of India’s friends — should do what they can to help India in its time of need.”
Dr. Arunabha Ghosh, CEO of the Council on Energy, Environment and Water, writes: “The tragedy of the pandemic will be aggravated if we do not heed its lessons. Not every crisis needs be a black swan, if we analyse data and anticipate risks. It is worse to ignore the known dangers of grey rhinos. As the climate crisis unfolds, perhaps what is needed is not a swan or a rhino but an Indian elephant, whose long memory can remind us of times when we were unprepared.”
Mythili Bhusnurmath, a journalist and former central banker, argues: “Governor Das described orderly development of the yield curve (read low rates) on government securities as a public good. What he failed to realize was that in a poor country, the best public good is low inflation. When the MPC meets next in early June, it must re-order its priorities. Instead of chasing elusive growth, it must revert to its swadharma, own dharma, and focus instead on inflation.”
Abhijit Singh, a retired Indian naval officer and a senior fellow at the Observer Research Foundation, argues: “While the Indian navy has sought closer engagement with the U.S. Navy, particularly in the aftermath of the India-China border clash in June last year, Indian observers believe that prevailing circumstances in the eastern Indian Ocean do not merit increased pressure by the U.S. Navy. As this essay explains, despite warming bilateral ties, New Delhi and Washington have somewhat incompatible expectations in the Indian Ocean, where the U.S. Navy has been increasingly active, obtruding — wittingly or unwittingly — on what many in India see as India’s sphere of natural influence. The general view among Indian commentators is that the best course for the United States and India is a middle path, whereby the U.S. Navy could aid the Indian navy materially and technologically in ways that might create greater stability and peace in the Indian Ocean.”
Thanks for reading this latest edition of Indialogue. Please let me know if you have any thoughts or feedback by emailing me at aman@amanthakker.com.