The world has to step up for India

It is the "pharmacy of the world," but addressing the COVID-19 crisis in India is not only about saving human lives but also securing a global economic recovery.

Nayantara Melissa Sudhakar (NMS) is a graduate student at the Max Bell School of Public Policy, where she serves as the VP of Equity, Diversity, and Inclusion for the Public Policy Association of Graduate Students (PPAGS). She is a Non-resident Indian (NRI) and hopes to use her education to contribute to a prosperous and strengthened Indian nation. Write us at newsletterthebell@gmail.com

THE STATE OF DELHI, which houses the capital of India, is reporting one death from COVID-19 every four minutes. To date, almost 23 million cases have been tallied, and these are only the ones reported amongst the chaos. To put it into perspective, this is fifty per cent more than the population of Ontario, the most populous province in Canada.

There is an extreme shortage of oxygen, ventilators, beds, and life-saving medicine amongst hospitals. Those who have the financial capital access supplies from the black market, and those who do not are at the mercy of an overburdened healthcare system. It is a humanitarian crisis, to say the least, and a significant test of multilateralism and foreign aid.

The COVID-19 pandemic has reversed years of socioeconomic progress in many Global South nations. Combined with the disruptions to trade, tourism, investment, and remittances, low and middle-income countries, such as India, struggle to find the resources to support their citizens’ health and safety at this time of crisis. 

Since the Indian Ocean tsunami crisis sixteen years ago, a general policy in rescue and relief operations has emerged, with India rejecting any form of bilateral assistance from foreign nations. This policy is due to India’s aspiration of showcasing its economic power to the world. However, given the dire COVID-19 situation, the current prime minister, Narendra Modi, has abandoned this stance and is receptive to overseas assistance, opening up a policy window for foreign aid. COVID-19 is a perfect example of a problem that requires a coordinated global response.

Countries worldwide need to make a much greater effort to help India with vaccine distribution, hospital services and support the incomes and livelihoods of the most vulnerable Indians if they wish to have a genuinely global recovery. So why should helping India matter to the world?

Firstly, India is known as the “pharmacy of the world.” The world’s largest vaccine maker, the Serum Institute, which produces the AstraZeneca vaccine, is a significant contributor to the COVAX initiative and provides doses to ninety-two developing nations. The urgent domestic need for these vaccinations means India will not live up to its international commitments, resulting in countries around the world seeing a drastic reduction in their ability to combat COVID-19. Canada has already felt the impact of this vaccine shortage, with India halting its previously negotiated 2.5 million vaccine deal. 

The containment measures put in place are also expected to cause a 20 percent plunge in oil demand. The source of this impact will be the disruption caused to the trucking industry, the backbone of the Indian economy, which provides jobs to 9.3 million truckers and about 5 million bus operators. Facts Global Energy (FGE) predicts daily gasoline demand will decline by 170,000 barrels a day this month, with diesel consumption decreasing by 400,000 barrels a day. If these predictions hold, Indian Oil Corp, India’s biggest fuel retailer, will have to consider cutting crude processing rates. As India is the world’s third-biggest crude oil importer and consumer, the slump in demand would likely ripple through the global market.

Preventing the spread of COVID-19 and its variants from India requires strict quarantine and travel restrictions. Many countries have banned travel from India during the surge, including Australia, the United States, the United Kingdom, the United Arab Emirates, and Canada. The travel ban is bad news for airlines, airports, and the businesses that depend on the millions of Indians who annually travel overseas, so this will have a sizeable dampening effect on global economic growth. The International Aviation Transport Agency (IATA) predicts the revenue impact for airlines operating to and from the Indian market will be a loss of $11.221 billion.

Furthermore, India’s financial attractiveness and skilled labor have made it the number one destination for the most offshore-outsourcing activities. Bangalore, also known as the “Indian Silicon Valley,”  is the fastest-growing tech ecosystem since 2016. However, outsourcing companies lack the infrastructure to provide “business as usual” in remote work and face mounting tactical and operational challenges with the pandemic. Given that many multinational corporations employ millions of Indian workers to run their back-office operations, they may need to carefully reconsider the established outsourcing model.

Recognizing the need for humanitarian support and the importance of India in the world economy, various nations have pledged their support, yet massive gaps in resources still remain.

The Biden Administration has committed to supporting India by sharing ventilators, personal protective equipment (PPE), rapid diagnostic test kits, and therapeutics. The United Kingdom is also deploying 600 pieces of oxygen concentrators, ventilators, and other medical supplies. Most recently, Prime Minister Justin Trudeau announced that Canada would donate $10 million to the Indian Red Cross in addition to supplying PPE and ventilators. Even Pakistan, which has a belligerent history with India, announced it would provide relief, including PPE, ventilators, and other medical assistance. However, with a 53 percent increase in COVID-19 cases in the past 14 days, the current international support is not nearly enough. India needs more foreign partners to step up and provide life-saving resources and match the generosity that India has displayed towards the Global North since the beginning of the pandemic.  

It will take months to get Indians vaccinated at the current rate of vaccination, making vaccine procurement a top priority. On January 18th, 2021, the World Health Organization (WHO) issued a call to all countries to stand in solidarity and contribute to the COVAX and the ACT Accelerator. The call to action urged nations that have an abundance of vaccines to donate to COVAX in order to help nations get their citizens vaccinated. Countries that have an abundance of vaccines should act on this call to action and increase India’s vaccination capacity. Furthermore, the present intellectual property rights and international regulations are serving as significant barriers to vaccine development. The first step to eliminating this barrier would be for nations and corporations to temporarily waive patents and facilitate technology transfer, a policy action the Biden administration has recently committed to. This could look like corporations providing teams who have the knowledge needed to produce vaccines and increase India’s manufacturing capacity beyond that of the Serum Institute.     

The European Union (EU) recently presented its global response to COVID-19, dedicating $30 billion in support for countries in Africa, Asia, Latin America, and eastern Europe, providing another source of aid to fight the Indian crisis. EU member states have pooled their resources and secured $22 billion to fund a coherent financial package targeted towards providing guarantees and liquidity provisions for local banks and increasing the global availability of PPE and medical devices. Given India is amongst the top 10 largest trading partners of the EU, it would be wise for the EU to use a portion of the $22 billion to secure life-saving tools such as oxygen cylinders, PPE, and medical equipment parts for India.

Such a model of regional nations pooling resources provides another opportunity for foreign nations to support India in its battle. India is a sectoral partner with the Association of Southeast Asian Nations (ASEAN) and has strategic alliances with various Southeast Asian countries to strengthen their nascent economies. Here too, it would be in their interests to contribute medical equipment, vaccinations, and PPE, before the Indian COVID-19 crisis causes further harm to their growing economies.      

Critics may claim that developed countries are grappling with their own national crisis and do not have the funds to support the citizens of other nations. Helping “others” instead of helping their own is a politically hard argument to digest. This has led countries to display a high degree of “vaccine nationalism,” prioritizing the vaccination of their citizens before sharing their supply with more vulnerable populations in the Global South.

But, we must recognize, global health is a global public good. If this isn't motivation enough, supporting India will help boost vaccination supplies, oil prices, and profits for the global economy. Understanding that none of us will be safe until all of us are safe is not only the right thing to do, but in a globalized world such as ours, it most definitely is the best insurance policy a nation can get.  (NMS)

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The Bell is edited by Emily Nickerson, Mariel Aramburu, and Andrew Potter of the Max Bell School of Public Policy at McGill University. If you have any feedback or would like to contribute to this newsletter, please send an email to the editors at newsletterthebell@gmail.com