The Centre is in talks with Serum Institute of India (SII) to slash the price of Oxford-AstraZeneca's vaccine against COVID-19, people aware of the matter said.
India has allowed emergency use of the vaccine developed by Oxford-AstraZeneca and another developed by Bharat Biotech.
Senior officials have been discussing the terms of the deal with the Serum Institute for weeks, hoping to bring down prices below Rs 220 ($3) per shot, one of the sources with direct knowledge told Reuters.
"Any government would do this, we need to keep costs down," the source said.
"Price is an issue with Serum. The government needs to control it," another official told Reuters.
SII chief executive Adar Poonawalla has said earlier the vaccine would be priced at about Rs 1,000 per dose for the private market in India and would cost the government about Rs 220 per dose.
Some officials are seeing the possibility of a further lowering of prices, the source said. Vaccinating a country of over 1.3 billion people involves a large cost and every rupee saved would help, the source added.
The government has announced the nationwide immunisation programme will begin on January 16. The plan is to cover 300 million people in the first part of the programme, kicking off with health workers, frontline staff such as police and then people over the age of 50 and those with comorbidities.
The AstraZeneca shot, locally branded as COVISHIELD in India, is expected to meet 90% of India's mass immunisation programme, the official said.
The government aims to secure 600 million doses for the country's vaccination drive aimed at inoculating 300 million citizens over the next six to eight months.