Pfizer and the Indian Government are at loggerheads over a demand by the US drug manufacturer for legal protection from any claims linked to the use of its Covid vaccine in one of the world’s biggest markets, two sources said.

India has not given any manufacturer of a Covid 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 US.

“The whole problem with Pfizer is the indemnity bond. Why should we sign it?” said an Indian Government source with direct knowledge of the matter. “If something happens, a patient dies, we will not be able to question them (Pfizer). If somebody challenges in a court of law, the Union Government will be responsible for everything, not the company,” the source added. Pfizer declined to comment, citing ongoing discussions with the government. The Union Health Ministry did not reply to requests for comment.

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

India, which is facing a shortage of shots as Covid cases soar, pledged last month to fast-track approvals for overseas vaccine makers, including Pfizer, Moderna and Johnson and Johnson.

However, none have since sought permission from India’s drug regulator to sell their vaccine in the country.

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 could not finalise terms of a supply agreement, including indemnity, if the vaccine was not first authorised 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, 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 drug maker’s shots in India could be found.