The Defence Production Act (DPA) invoked by Trump to ensure that US companies involved in the manufacture of all the ingredients that go into the making of vaccines serve domestic needs first. This Act has been expanded by the Biden Administration, resulting in an effective ban on US export of various items needed by Indian pharmaceutical companies to locally manufacture anti-Covid vaccines.
What is little known is that the US has a virtual stranglehold on global vaccine production. No country, including Russia, can produce vaccines totally autonomously as some ingredients have to be imported from the US. As a result of the DPA even European companies have been compelled to sell the components of vaccine manufacturing to the US, for fear of falling afoul of the law and inviting secondary sanctions owing to the extra-territorial application of US laws. This means that India cannot easily explore alternative supply sources in Europe or elsewhere.
The Indian government had been in touch with the US government on this squeeze on Indian companies, especially the External Affairs Minister who had been in touch with Secretary of State Blinken. The Indian government has been rightly discreet in the hope of resolving the issue with quiet diplomacy. The public appeal to President Biden by A. Poonawala of the Serum Institute of India brought out the issue in the open. Its handling by the US has been abysmal, with its spokespersons equivocating on India’s needs when the pandemic has been raging locally, offering callous and self-centred arguments to the effect that America’s needs have to be met foremost and that controlling the virus infections in the US is good for the world because if controlled there they will not spread elsewhere. For more than a week, despite questioning by the media, the US side had wavered in giving any reassuring reply about India’s pressing needs.
The result had been an explosion of public rage in India against the US, especially in the social media. Alongside this, some pressure came from US Congressmen on the White House on opening supplies to India. Some had even advocated that the US should support the proposal made by India and South Africa to the WTO to temporarily suspend patents for Covid vaccines to facilitate scaled up production of vaccines to meet global needs.
The US position has been illogical and vulnerable on many counts. The US cannot accuse China of a stranglehold on critical raw material supply chains- including in the health sector- and the need to develop resilient supply chains with the participation of democracies, and be seen as emulating China in monopolising raw materials for the manufacture of vaccines in a fellow democracy like India with which in joint bilateral and Quad statements the need for resilient supply chains is dutifully mentioned.
The Quad virtual summit had agreed to a joint project that involves India producing 1 billion doses of the Johnson vaccine for the Indo-Pacific region with Japanese financing and delivery by Australia. A joint working group set up to implement the project is expected to report to the next summit planned for the end of the year. For manufacturing the American vaccine India will need all the ingredients currently blocked by the DPA. Evidently, the DPA will have to be reviewed to make the Quad project possible. Why the US has not immediately seen this evident contradiction in its position is a bit baffling.
After some delay the US has revised its position. NSA Ajit Doval has spoken to his counterpart Jake Sullivan who has announced US readiness to come to India’s assistance with supplies of vaccine-production material, as well as therapeutics, tests, ventilators and protective equipment. President Biden has tweeted that the US is determined to help India face the health crisis, while acknowledging India’s assistance last year when the US in the face of a terrible Covid-19 crisis received assistance from India. This has been followed up with a phone conversation between Prime Minister Modi and President Biden, described by the former in a tweet as a fruitful conversation in which the PM thanked the president for the support being provided by the US to India.
According to the Indian side, Biden “conveyed solidarity with India and affirmed that the United States was determined to support India’s efforts by quickly deploying resources such as therapeutics, ventilators and identifying sources of raw materials to be made available for the manufacture of Covishield vaccines”. Modi on his part mentioned India’s commitment to contain the COVID-19 pandemic globally through Vaccine Maitri, and its participation in COVAX and the Quad Vaccine Initiatives. The Prime Minister underscored the need to ensure smooth and open supply chains of raw materials and inputs required for manufacture of vaccines, medicines, and therapeutics related to COVID-19”. Both leaders underlined the potential of the India-US partnership in vaccine development and supply to address the COVID-19 pandemic, and directed their respective officials to maintain close coordination and cooperation in their efforts in this domain.” Modi also informed Biden about India’s initiative at the WTO for a relaxation in the norms to ensure quick and affordable access to vaccines and medicines for developing countries.
The White House read-out said Biden pledged the US “steadfast support” for India. A day earlier Tim Manning, the White House covid-19 Supply Coordinator in a Twitter post said that the US had “diverted our pending orders of vaccine filters to India’s vaccine manufacturing effort. This will help India make more vaccine. And it’s only one effort among many to help the their COVID19 response (e.g. therapeutics, PPE, and oxygen).” Vice-President Harris, Defence Secretary Austin and US Deputy Secretary of State Wendy Sherman have also issued messages of support to India, with the US Defence Department being directed to send across necessary equipment needed by Indian health workers.
So far so good. By quickly revising its position the US has prevented deeper fissures developing in ties because of a roused public opinion. The government’s wisdom in relying on persuasion through diplomatic contacts has worked well but there is much work ahead. The US speaks of making available raw materials for making Covishield vaccine, which leaves open such availability for other vaccines to be produced in India, be it Covavax or even Sputnik. PM Modi raised a broader agenda in his conversation with President Biden, namely, a relaxation of norms at the WTO for affordable vaccine supply to developing countries on which the White House readout was silent. It is most unlikely that the US government will agree to this as this will risk creating a precedent and will severely undermine the US position on IPRs and patent issues that has been backed ferociously by the major US pharmaceutical companies, with Pfizer in the lead.
The diplomatic game with the US on vaccine issues is not yet over. The thread will be taken up when Minister Jaishankar will meet his US counterpart Blinken at the G7 summit in London in a few days. What is important is that with the reversal of its position on supply of raw materials for Covishield production in India and other forms of assistance in which the US private sector has been mobilised in a big way, a serious set back to expanding India-US ties has been avoided.
Kanwal Sibal is a distinguished career diplomat who retired as Foreign Secretary to the Government of India. In 2017, The Government of India awarded him with the Padma Shri award for his distinguished services in the field of Public Affairs.
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