Department for International Trade’s open consultation: Call for input on trade with India – summer 2021

Who we are

1. The NHS Confederation is the membership body that brings together and speaks on behalf of organisations that plan, commission and provide NHS services in England, Northern Ireland and Wales. We represent hospitals, community and mental health providers, ambulance trusts, primary care networks and federations, clinical commissioning groups and integrated care systems. Some of our members work internationally in addition to delivering domestic services.

2. In responding to this consultation, we have sought feedback from our NHS member organisations regarding their experiences (successful and unsuccessful) of collaboration with organisations in India. We have also exchanged views with Government departments and agencies, with the British High Commission in India, and participated in discussions with a range of external NGOs, academic experts and patient and industry stakeholders.

Our priorities in a future free trade agreement (from the consultation checklist)

3. Services, digital, innovation, government procurement, intellectual property, investment, dispute settlement, recognition of professional qualifications.

4. As our NHS members are primarily providers and commissioners of health services this response is framed with trading partnerships between individual Trusts and partners in India in mind. The wider NHS also has a massive interest in future investment and innovation in new medicines and health technologies and in the research that underpins them. India is an important prospective partner for these activities given their strong science and technology base. These commercial activities however are more often conducted by private industry, research institutes or by Government and its agencies, so we have not focused primarily on these aspects in our response to the consultation

Why these issues matter to our members

5. The NHS has strong connections with India, especially as a source of staff (historically, the UK has recruited healthcare professionals from India in large numbers); supply of medicinal products, especially as India is a major supplier of cheap generic medicines; and as an increasingly important collaborator in the fields of science and technology, including healthcare research and innovation.

Services

6. As in the UK’s trade agreements with other countries, we expect the UK to schedule reservations for health services in line with our WTO GPA reservations, excluding publicly funded healthcare services from the scope of the FTA and/or exempting such services from liberalisation commitments. The NHS Confederation has consistently argued that the NHS should be kept “off the table” in this manner. See the Confederation’s 2019 paper “The NHS and future free trade agreements”.

7. Existing UK trade agreements explicitly recognise the right of government to protect and promote public health and safety, through policy, legislation and regulation. 

8. This does not however preclude NHS organisations from inviting bids from overseas investors to provide services to benefit patients, as at present, and we would welcome the opportunity for our members to provide services in India in a similar fashion.  We note that the UK has not taken out reservations in respect of digital health services, which (given the geographical distance between the two countries and the expansion of remote service provision over the internet) could offer significant opportunities. A free trade agreement with India that included provisions such as removing disproportionate barriers to overseas bidders for services and for data sharing, protecting intellectual property rights, establishing fair procedures for dispute resolution and facilitating regulatory convergence for standards in both goods and services would be a “win/win” for both countries.

Healthcare partnerships

9. Some of our NHS members have established partnerships with public or private healthcare organisations in India, at national, state or local level. These tend to involve transfer of knowledge/expertise, usually but not always conducted remotely, and often include delivering education and training, or developing clinical guidelines and protocols for local piloting and customisation, normally on a commercial basis. A highly successful example is the partnership between Guys and St Thomas’s NHS Foundation Trust and the Indian company Karkinos Healthcare to provided blended (online and face to face) cancer education for healthcare professionals in Southern India. This partnership is helping to improve cancer care for Indian patients whilst simultaneously generating revenue to plough back into NHS frontline services.

10 Another successful example is the partnership between South Central Ambulance Service NHS Foundation Trust and the South Indian state of Andhra Pradesh to provide much improved ambulance services, recruiting, training and equipping ambulance staff. See paragraph 23 for a detailed description.

11. There are opportunities for raising revenue for the NHS from this kind of activity as India becomes more prosperous. Currently the main limiting factor is financial – the Indian market is big but funding in the public sector is tightly controlled, making the profit margin for UK organisations commercially unattractive in many instances. In addition, UK public sector organisations are not exempt from paying tax in India on the income they generate.

12. NHS and other organisations involved in collaborative ventures with counterparts in India report barriers relating to contractual/legal requirements such as data location, dispute settlement procedures and jurisdiction, and (mis) use of branding. See paragraphs 18 to 25 for further detail and suggestions for mitigation.

Innovation and research

13. The NHS has an excellent worldwide reputation, and association with the NHS “brand” is much coveted abroad. In addition, the UK is an acknowledged life sciences powerhouse and a world leader in research and innovation in (for example) genomics and artificial intelligence. India too has a strong science base and there are significant opportunities for future collaboration in healthcare including pharmaceuticals, medical technology and life sciences that could be facilitated by reducing trade barriers. 

14. On a practical level, the use of English as an official language in India enhances the attractiveness of UK/India partnerships in the delivery of education, training, clinical consultancy and collaboration in medical, scientific and technological research. 

Workforce

15. India is an important source of international recruitment for the UK, especially as medical and nursing education and training is delivered in English and is similar to the UK model. Indian applicants for professional registration with UK regulators such as the GMC and NMC must meet UK standards and it is important that these are not compromised. A trade agreement, combined with domestic immigration policy, could be used to facilitate international mobility by covering movement of natural persons supplying services and reducing immigration barriers for desirable migrants with medical, scientific or technical skills.

16. There are examples across the UK of successful workforce partnerships between the two countries, such as fellowships/sponsored exchanges of healthcare professionals. Sometimes these spring from personal connections, for example an Indian consultant working in the NHS may have strong ties with clinical counterparts in India and may foster a mutually beneficial relationship between their respective organisations. A more structured example has been the success of Health Education England’s “Earn, Learn and Return” programme whereby overseas healthcare professionals come to the UK for a specified period to work, returning to their home country with enhanced experience, skills and (in some cases) evidence of further training and qualifications.

Top priorities

17. Very difficult to rank, but probably services, innovation and intellectual property rights (IPR).

Causes of difficulties experienced in attempting to trade with partners in India

18. These include:

• Tendering and procurement – favouring of domestic bidders
• Contract fulfilment- jurisdiction over contracts
• Legal/IPR requirements  e.g misuse of NHS branding
• Data protection/localisation e.g access to NHS patient data, data privacy
• Other - Corruption, taxation trap, low profit margin
• Dispute settlement – need for fair and transparent arbitration procedures (not ISDS) that explicitly recognise right of govts to promote public health and safety, including through regulation.

Impact of these difficulties

19. Several NHS organisations we spoke to reported frustration that they seemed to be making good progress in talks around collaboration with partners in India, for example for online training, protocols or guidelines, only to fall foul of barriers such as the Indian partner wanting exclusive “rights” over the product being developed, wanting to co-brand using the NHS logo thereby implying NHS endorsement of their services/products, concerns around intellectual property rights, and so on. Several prospective contracts had never materialised as a result.

20. Many successful partnerships involve recruitment of staff from India and mutually beneficial exchanges. These tend to steer clear of the problem areas identified in paragraph 18.

21. More extensive trading has been hampered by cost factors – NHS organisations cannot make a lot of money out of trading with India as they do, for example, when entering into commercial activities supplying clinical services, education and expertise into wealthy Middle Eastern Gulf states. There is increasing potential for this kind of activity with the Indian private healthcare sector, providing services to the affluent urban middle classes, but little opportunity to get a commercial return from the public healthcare sector which serves the bulk of the population. This has been cited as the main reason why NHS Trusts tend not to actively pursue commercial partnerships in India.

22. This is exacerbated by the inability of public bodies, unlike companies, to claim exemption from corporation tax (currently in the region of 10%) on income earned in India. A tax agreement between the two countries rectifying this situation would be extremely helpful.

23. There are however examples of “success stories”, albeit not without their difficulties. An ambulance Trust in the UK has formed part of a consortium paid by the State government of Andhra Pradesh to improve ambulance services to this vast and largely impoverished rural area. The contract has involved the South Central Ambulance Service NHS Foundation Trust recruiting and providing basic training for staff in India to the level required to achieve registration as ambulance personnel, and subsequent update/refresher training. Other consortium partners supply the ambulance vehicles and equipment and the “control room” infrastructure. In addition to providing transport to hospitals, the service tours remote areas and provides mobile ambulance clinics, and is making a significant and worthwhile difference to access to healthcare for the local population.

24. The Trust has made a small profit but has learnt that it is wise to be very careful about the terms of contracts as they have experienced issues with one of the consortium partners making unauthorised use of the NHS “logo” for branding purposes. They also commented on the need to make it clear that they were not prepared to engage in “backhanders” of any sort (e.g.to local officials) to expedite procedures.  

What were the biggest challenges to securing contracts?

25. Legal and contractual issues, as explained above.

Commercial unattractiveness/price differential – Indian public sector can’t afford to pay enough to generate a worthwhile profit margin.

BUT this may not apply to agreements with private companies, e.g. for innovation and research – so may be lucrative for UK healthcare industry.

Recommendations to government – solutions in a future FTA

26. We recommend:

• Reservations for health services in line with the UK’s WTO GPA reservations, excluding publicly funded healthcare services from the scope of the FTA and/or exempting such services from liberalisation commitments
• Recognition of the right of government to protect and promote public health and safety, through policy, legislation and regulation
• Agreement on intellectual property (IPR)
• Agreement on fair and transparent dispute settlement procedures
• Digital/data sharing agreement to enable maximum collaboration on data sharing.  Removing barriers to unjustified data location. Making anonymised NHS data accessible for research and innovation.
• Exempt public bodies from overseas tax liabilities in the same way as private companies
• Maximum alignment of regulatory standards, for example for the development and manufacturing of medicines and medical devices.