Boris Johnson Walks Away Laughing With India’s Serum Institute

Three cheers for the Indian Supreme Court’s suo moto intervention on the issue of distribution of essential supplies and services during the pandemic. India, the “world pharmacy”, is entering shark-infested waters, as vaccine supply is getting intertwined with the country’s opaque decision-making, its powerful corporate culture and episodic diplomacy.

The report that the Serum Institute of India (SII) is making a whopping investment of GBP 240 million and shifting the main focus of its R&D and vaccine production to the United Kingdom underline that the Indian company is moving into greener pastures. Boris Johnson made an offer to the Indian company that it couldn’t refuse, to borrow the famous words of Don Corleone, played by Marlon Brando, in the film The Godfather. The text of Downing Street announcement is here.

The Downing Street has bragged that the SII will set up a sales office also in the UK, which “is expected to generate new business worth over USD 1 billion, GBP 200 million of which will be invested into the UK.” It added,

“Serum’s investment will support clinical trials, research and development and possibly manufacturing of vaccines. This will help the UK and the world to defeat the coronavirus pandemic and other deadly diseases. Serum has already started phase one trials in the UK of a one-dose nasal vaccine for coronavirus, in partnership with Codagenix INC.”

Without doubt, Johnson has stolen a march over PM Modi just when the Indian foreign policy establishment is daydreaming about the possible induction of the UK into the Quad to contain China. Clearly, Johnson’s priorities are different — transfuse lifeblood from the former colony, the jewel in the Crown, into his “Global Britain” project.

Johnson is a clever politician as his meteoric ascendance to the Downing Street testifies. He is sure to massage the Indian ego and have the news of the transfer of residence of the SII to Global Britain make a “soft landing” in the Indian public awareness. Johnson’s calling Modi later today.

He’s also invited Modi as a “guest” at the G7 summit he’s hosting in Cornwall from June 11-13. The MEA is thrilled at the prospect of PM being ushered into the chamber of the wealthiest countries on the planet. EAM S.Jaishankar already visited London as the “sherpa”. At what point, if at all, our smart alecks in the South Block got wind of it — that Johnson and Poonawalla were planning a party — will remain forever in the domain of the “unknown unknown.”

The Downing Street has also indulged in a flashy gesture of humanitarian help to ease India’s pain and suffering. A verbose press release from Downing Street is titled “UK sends further life-saving support to India”. Plainly put, the UK is gifting India 1200 ventillators, 495 oxygen concentrators and 3 oxygen generation units.

Of course, every drop matters to the empty bucket, but at this rate, what should Beijing expect as gratitude from the Indian nation? China is today by far the single biggest supplier of medicines, medical equipments to India to cope with the pandemic.

Johnson’s antics sidetrack attention from his highjacking of the SII to Britain just when India needed that flag carrier in vaccine production to remain focused on the country’s pandemic. Johnson is having a repeat performance after his shameful backstabbing of the European Union.

How the UK outsmarted the EU over AstraZeneca vaccine (Covishield) makes a truly epic story. As Politico newspaper put it succinctly, the UK simply secured a better contract with AstraZeneca than the EU did. Johnson ensured that the clauses in the UK’s vaccine supply contracts required vaccine producers such as AstraZeneca (or SII for that matter) to supply it preferentially: that is, if there are production shortages, then the UK order must be fulfilled by diverting supplies from other customers. A failure to do so attracts fierce penalties.

Furthermore, London made sure that its deal with vaccine manufacturers had extra teeth. Thus, while the UK has had its orders fully met, the EU received only less than a quarter of what it had contracted for from AstraZeneca! Suffice to say, two-thirds of UK’s vaccine rollout has been met out of European production!

But Johnson was unmoved when the Europeans cried foul. He calmly insisted that he has a right to preferential supply, because that is what the contract says. He’s on strong grounds too since, after all, the UK government invested in the research, done at the University of Oxford, that powered the AstraZeneca (Covishield) vaccine and the firm has its headquarters in Chesterford Research Park, Cambridge, England.

Interestingly, the SII too received a legal notice from AstraZeneca in late March over delays in the supply of vaccine to the UK. The SII promptly referred it to Modi Govt. We do not know what transpired between Delhi and London but conceivably, MEA didn’t intervene, given the upcoming photo-op in Cornwall.

The big question is: Are Indian laws so toothless to protect national interests? Again, how far SII played street smart betwixt Modi and Johnson also remains uncertain. The SII boss Adar Poonawalla himself claimed in a weekend interview with London Times newspaper that “some of the most powerful men in India” hounded him out of India and the pressure on him was “incessant and very menacing.”

Professor Gareth Davies, well-known barrister and academic on EU Law at the Vrije Universiteit in Amsterdam wrote recently, “But signing a preferential contract with someone else is not force majeure: it is just selling the same stuff twice. AstraZeneca’s EU obligations are not diminished by its promises to the UK… It appears to have promised too much to too many people.” Now, replace the words “AstraZeneca” and “EU” with SII and India respectively, and an ugly picture pops up.

Prof. Davies adds, “The question is why AstraZeneca chose to breach the EU contract rather than the UK one. This will be largely because the UK deal had much harsher penalties — the EU deal has no penalties beyond non-payment and requires informal negotiation rather than litigation when problems arise.”

Prof. Davies weighs in: “Rather, it seems that the UK contracted better in the sole sense that its contract was more expensive to breach. That is partly a product of different legal systems and their styles: European contracting parties tend to see contracts as a tool to build up trust and long-term relationships. Anglo-American legal culture tends to see contracts as a way to avoid needing trust at all.”

However, aren’t Indian laws progenies of the Anglo-American legal culture? If so, the bottom line is, what the UK is getting out of the SII is what India is losing. And the responsibility of the Indian state ought to have been to dictate where the SII’s vaccine doses should go. Importantly, it remains unclear how far back the smart alecks in Delhi began sensing, if all, that Johnson and Poonawalla were planning a party.

Boris Johnson is consistent: Brits shall help themselves first. He is ditto like Joe Biden. Both say they are willing to help others but only after their needs are met. So far, that point hasn’t been reached. Johnson ridiculed the EU as utterly foolish and a loser. Indeed, the UK has fully vaccinated 21% of its population as of last weekend while the EU, a paltry 9%.

Johnson plays hard ball. He has no time for Vasudhaiva Kutumbakam. “The reason we have the vaccine success is because of capitalism, because of greed, my friends,” Johnson said in a recent call with British MPs.