Pfizer  and the Indian government are at loggerheads over a demand by the U.S. drugmaker for legal protection from any claims linked to the use of its COVID-19 vaccine in one of the world's biggest markets, two sources told Reuters.

India has not given any manufacturer of a COVID-19 vaccine indemnity against the costs of compensation for any severe side effects, which is a condition Pfizer has obtained in many countries where its shots have already been widely rolled out, including Britain and the United States.

"The whole problem with Pfizer is the indemnity bond. Why should we sign it?" an Indian government source with direct knowledge of the matter told Reuters.

"If something happens, a patient dies, we will not be able to question them (Pfizer). If somebody challenges in a court of law, the central government will be responsible for everything, not the company," the source added.

Pfizer declined to comment, citing ongoing discussions with the government. India's health ministry did not reply to Reuters requests for comment on Friday.

The second source said Pfizer has been consistent in its position on indemnity and is not planning to change its approach for a deal with India.

Both sources declined to be named as they were not authorised to talk to the media.


India, which is facing a shortage of shots as coronavirus cases soar, pledged last month to fast-track approvals for overseas vaccine makers including Pfizer, Moderna (MRNA.O) and Johnson and Johnson (JNJ.N).

However, none have since sought permission from India's drug regulator to sell their vaccine in the country, which has a population of 1.35 billion. read more

The second source said the other issue being discussed between Pfizer and New Delhi was the Indian government's insistence on a local trial for any vaccine approval. The source added that Pfizer cannot finalize terms of a supply agreement, including indemnity, if the vaccine is not first authorized for use in India.

Pfizer withdrew its application for emergency use authorisation for the vaccine developed with Germany's BioNTech in February after India insisted on such a trial.

But three other shots on sale in India, developed by AstraZeneca (AZN.L), Russia's Sputnik V and Bharat Biotech in collaboration with state-run Indian Council of Medical Research, have completed the small-scale safety trials.

Albert Bourla, Pfizer's chief executive said on May 4 that he was hopeful that the government would change its policy of local trials and that a path to delivering the drugmaker's shots in India could be found.

A third source told Reuters that India's foreign minister would visit the United States this month or in early June to try and address Pfizer's concerns and ease exports of vaccine raw materials to India.

The Indian foreign ministry did not immediately respond to a request for comment.