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The Infrastructure that Led to India’s Covid Crisis

Updated: Nov 13, 2021

The preexisting healthcare infrastructure in India and the India-US trade relationship have affected India’s economy and public wellbeing in the wake of a devastating COVID-19 surge.

In India, receiving top-of-the-line medical services is a luxury accessible to only urban India, which makes up roughly 34% of the country’s population. The remaining population can go to government-run health care facilities, where healthcare is virtually free.

The issue, however, lies in how little the government cares about its healthcare spending. Only 10% of hospitals in India are government-run. These government facilities aren’t shiny glass hospitals with high tech, either. Government facilities are chronically understaffed, overworked, and undersupplied. This comes as no surprise—only 1% of India’s GDP goes to funding healthcare, marking it as one of the lowest in any major economy.

Good government facilities exist, but few are located in rural, generally poorer, areas. The pay-to-win medical infrastructure in India only forces households with no nearby free hospitals to get healthcare from private providers and pay out-of-pocket. The disparity between the healthcare urban and rural Indians receive is largely because of the government’s “hands-off” approach. State governments are responsible for providing healthcare services and health education, while the overall Indian government is responsible for covering administrative and technical services. This results in affluent, metropolitan states like Mumbai having luxurious hospitals equipped with their own research centers, while poor states like Bihar are scrounging for hospitals that provide the most basic healthcare.

In order to address the lack of medical coverage in rural areas, the Indian government launched the National Rural Health Mission in 2005. The mission focused on providing medical resources for the poorest rural states with the most vulnerable populations. The program was subsumed by the National Health Mission and lasted till March of 2020 when COVID-19 devastated the nation. As of now, India is suffocating. An entire nation, a country of over a billion people, a country older than “more developed” colonizer countries has been toppled. The rural community has inevitably been hit the hardest.

To combat this, the government must change their decentralized approach to healthcare by allocating at least 5% of their GDP to healthcare, the World Health Organization recommended percentage. This money can be acquired by temporarily halting excessive and unnecessary projects in metropolitan cities, an example being luxury hotel development. The government could also invest in their main source of revenue: the IT industry. Using this influx of cash, they would continue the National Health Mission and work to ensure rural Indians are getting accessible and affordable healthcare during the pandemic.

The Indian healthcare industry needs to be reworked through policy change, but its history with the US is another determining factor in the scheme of the second COVID surge.

India’s relationship with the US plays a critical role in staunching the effects of the coronavirus. However, their trade relationship has been fraught with insidious dealings for the past few years. In mid-2019, Trump ended India’s preferential trade status, which dated back to the 1970s, a special status that allowed Indian products to enter the U.S. market duty-free.

Ever since, no Indian product has been able to pass through the US economy without being slapped with imports, sales, or some other tax. In retaliation, India put tariffs on 28 U.S. products. Indian and U.S. officials have disagreed for years on tariffs and foreign investment limitations, particularly agriculture and medical technology. These two intertwine even more significantly in the scope of vaccinating the Indian public, which currently is only 10% vaccinated.

More recently, in 2021, The Biden Administration stuck an embargo on raw exports from the US, severely impacting vaccine manufacturing in India. Biden invoked the US Defence Production to order domestic businesses and companies to prioritize US-based projects and federal contracts so that critical materials for vaccine production and distribution would accumulate.

However, the incentivized increase in Pfizer and BioTech raw material production put a strain on the same exports these companies were producing. Certain exports were banned as well, primarily those necessary in producing CoviShield Indian vaccines. Due to Biden’s decision, the US could not meet its export commitments to India. This did not bode well with key government players. “By stockpiling vaccines and blocking the export of crucial raw materials needed for vaccine production, the United States is undermining the strategic Indo-US partnership,” fumed Mumbaiker politician Milind Deora. Ulka Kelkar, director of the Indian branch of the climate program at the World Resources Institute, spoke on how the US actions in the pandemic drew a parallel to the India-US climate diplomacy relationship by saying, “This is pathetic. Is this what the U.S.’ “leadership” in the climate crisis will look like? Spare us the talking points.” Needless to restate, Indian government officials are upset.

While the embargo was lifted a few weeks ago, the crippling effect it had on the Indian economy is undeniable. Considering the past India-US trade relationship, the US’s raw material withdrawal exacerbated issues. Instead of US government officials parroting on Twitter that they are “committed to helping India,” real change is needed. First, the US should provide funds to grassroots organizations within India itself, rather than a corrupt government that bears little to no transparency when it comes to its healthcare industry.

These organizations would include Association for India's Development, Direct Relief, Oxygen for India, and Khalsa Aid. The US should also fulfill their previous quota of raw materials exports to India by now incentivizing companies to produce the exports they held off on. However, the US could also spur companies to produce more exports than what is needed to fulfill the bare minimum number. The US could also endorse previously rural-serving programs like the National Health Mission through funding.

There are many solutions that can attempt to fix the current state of matters. In the end, India’s covid crisis will not be solved by inaction. You can donate to the organizations listed above to provide relief or spread the word to friends who can and are willing to donate.

Written by: Neha Dubhashi


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