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Explainer: Why India is relaxing export restrictions on COVID-19 vaccines

For one, India has to keep its commitment under a global initiative called COVAX. The other reason, as an expert says, is that if India doesn't ease export restrictions, it will benefit China, which is making deeper inroads into low and middle-income countries with vaccine diplomacy.

September 21, 2021 / 01:52 PM IST
The government spent Rs 9,229.31 crore between March and July to procure 124 crore doses from three manufacturers.

The government spent Rs 9,229.31 crore between March and July to procure 124 crore doses from three manufacturers.


Health and Family Welfare Minister Mansukh Mandaviya, on September 20, announced that the government would allow the export of COVID-19 vaccines in the fourth quarter of this year, and fulfil its COVAX commitment.

COVAX, or COVID-19 Vaccines Global Access, is a global initiative for the equitable distribution of jabs to people in low-and middle-income countries.

Easing supply situation

The supply situation of COVID-19 vaccines has eased considerably from a huge demand-supply mismatch in Q1FY22. The minister said more than 30 crore doses would be produced in October and more than 100 crores by December-end.

In September, the availability of COVID vaccines increased to more than 20-22 crore doses. Serum Institute of India (SII) is producing over 16 crore Covishield doses per month, and it is working on further scaling up these numbers in the coming months. Covishield is used for 87 percent of India's vaccination.

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COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Bharat Biotech, which manufactures the indigenous Covaxin, produced about 2 crore vaccine doses in August. It has more than doubled the number in September, with the Malur facility in Karnataka and Ankleshwar units coming on stream.

Zydus Cadila has indicated it will be supplying 1 crore doses of ZyCoV-D in October. Sputnik V has lagged behind due to issues of yield. While the supplies of Pfizer, Moderna and Johnson & Johnson will depend on resolving the indemnity stalemate, the approval of Covavax by SII, under licence from Novavax, and Biological E's Corbevax in October-December are good news. SII said it could produce eight crore doses of Covavax per month.

Acceleration of vaccination

India has fully vaccinated 80 percent of the healthcare and frontline workers, and has covered 54 percent of the population above 60 years, with over 54.3 percent full- vaccination coverage.

On September 21, India's COVID-19 vaccination coverage stood at 81.85 crores, of which about 20.9 crore people are fully vaccinated. India is currently vaccinating people above 18 years. So far, 64.8 percent of the eligible population has received the first dose of COVID-19 and 25.5 percent have got a second shot as well. India has accelerated its vaccination drive significantly. In 11 days, India completed 10 crore vaccinations.

COVAX commitments

India had shipped 66 million doses of vaccines overseas through donations, bilateral arrangements, and sales. The exports were halted in April as the country coped with a deadly second wave of Coronavirus.

COVAX has raised more than $10 billion, thus legally binding commitments for up to 4.5 billion doses of vaccine.

But COVAX could only deliver 240 million doses to 139 countries in six months. According to its latest supply forecast, COVAX expects to have access to 1.425 billion doses of vaccine in 2021.

SII alone promised to provide 550 million doses of Covishield to COVAX. The company also received $300 million funding from the Bill & Melinda Gates Foundation.

"If India does not ease export restrictions, the world may not see India as a reliable supplier, which will benefit China, as it is making deeper inroads into low and middle-income countries with vaccine diplomacy," said Prof Amir Ullah Khan, Research Director - Centre for Development Policy and Practice (CDPP).

Export boost

According to rating agency CARE Ratings, the export opportunities to various African, Asian (excluding China and Japan) and some South American countries (where the pace of vaccination remains very slow) still exist, and it expects to remain greater than 1.25 billion doses.

Furthermore, several countries are considering giving booster doses to their population. This will also add to the present supply opportunities.

"Although Indian vaccine manufacturers are unlikely to get the
premium pricing, of anywhere between $15 and $25 per dose, being enjoyed by US-based multinational companies (MNCs), their average realisation could remain anywhere between $3.25 and $3.50 per dose,” it said.

On an aggregate level (i.e., domestic plus export), CARE Ratings expects a supply opportunity of around $10 billion-$11 billion during the next three years for Indian vaccine manufacturers.

Key risks

India has fully vaccinated about 18.5 percent of the population, and still has a long way to go. India needs at least 1.2 billion doses more to reach a meaningful level of vaccination coverage to fully open up the economy. Any requirement of a booster dose or a third dose could complicate the situation.
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Sep 21, 2021 01:52 pm

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