Covid-19 Vaccination Good News! India to vaccinate itself back to normal, says Barclays

The government’s planned vaccination drive from 16 January should entrench the ongoing broad economic recovery and accelerate the economy’s return to normal. While the target of vaccinating 300mn people by August may appear daunting, India has several favourable factors on its side.

The start of India’s COVID-19 vaccination programme on 16 January1 should allow the final mile of unlocking of the economy in Q1 2021, including discretionary services and workplaces. Barclays expects this unlocking to drive growth higher through H1 2022. As such, Barclays maintains our FY 2021-22 GDP growth forecast at 8.5%, despite emergent risks from weaker growth in the EU and Japan, which recently imposed new mobility restrictions amid rising COVID-19 infections.

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The government has set itself a formidable target of vaccinating the at-risk population of 300mn by August 2021 - the first phase will see the vaccination of about 30mn healthcare and frontline workers, followed by 260mn of the 50-years plus population.

The supply and procurement of the COVID vaccines are unlikely to be a hurdle to achieving the government’s targets. By our estimates, current official supply projections for the two approved vaccines are likely to be sufficient to vaccinate more than 70% of the targeted population by August. To make up for potential shortfalls, the government is considering at least three more vaccines that are in late-stage trials. If these vaccines are approved in the near term, their supply should be able to ease any supply bottlenecks by Q3.

Even though herd immunity is likely a long way off for India, the country’s relatively younger demographics is an advantage that should also facilitate the resumption of normal activities. In addition, with a large section of the population having already been infected and recovered from COVID, the presence of antibodies to the virus is likely to be widespread.

Vaccinating its way to normal:

India plans to start its COVID-19 vaccination programme from 16 January, having purchased 11mn vaccines from the Serum Institute of India (SII), the manufacturing partner of AstraZeneca (Oxford vaccine). The Drugs Controller General of India (DGCI) has approved a full two-dose regimen, citing an overall efficacy rate of 70.42%.

A second vaccine, Bharat Biotech’s Covaxin developed in India, has also been given emergency approval, and the government has purchased 5.5mn doses. As Phase-III trials for Covaxin are ongoing, Barclays think this vaccine will likely be rolled out later for mass vaccinations.