Panacea Biotech and Bharat Biotech are in talks for making Covaxin Vaccine at the former’s New Delhi facility as the Hyderabad-based company looks at contract manufacturing options to expand its capacity amidst growing demand for Covid-19 jabs.Discussions are at an early stage and could be conditional on the government agreeing to provide easy financing for the new production line, an official aware of the development told ET. If the funding comes through, production could start by June. Panacea is one of the few vaccine makers with Bio Safety Level 3 manufacturing facilities that is required for the production of Covaxin, which uses the inactivated virus is develop the vaccine.These facilities ensure that there is no contamination of the vaccine and the manufacturing staff is kept safe from infection. Not many companies can handle the manufacturing of such vaccines, said a official aware of the vaccine manufacturing process. “Manufacturing vaccines is a different game all together. It needs specialized setting,” said this official. 81961957When contacted Bharat Bio and Panacea did not respond to ET's email. Several state governments have said their stock of vaccines is running low and they are facing shortages. The central government has, however, said allegations of vaccine shortages are baseless and vaccine supplies are being monitored on a real-time basis. It has said till the time supply is limited, it will continue to prioritize more vulnerable groups.At present, Bharat Biotech’s Covaxin and Serum Institute of India’s Covishield are the only two vaccines available in India.Their combined monthly production capacity is just over 70 million doses of which Serum accounts for the almost 90%.This capacity is clearly not enough vaccinate large number of people quickly, a prerequisite for halting the spread of the virus. Experts have called upon both companies to ramp up production and have asked the government to approve the use of more vaccines in the country. The government has set up an inter ministerial group to look at ways to augment vaccine production. At a recent meeting with the prime minister, a health ministry presentation said it estimated monthly vaccine production to go up to 140 million doses by August this year.In addition to looking at contract manufacturing options, Bharat Biotech is also planning to use its Bengaluru facility, which was set up to manufacture vaccines for animals, for making Covaxin.Earlier this week, Panacea Biotech tied up with the Russian Development Investment Fund (RDIF) to manufacture 100 million doses of the Sputnik V vaccine. But this deal with RDIF is for exports and not to cater to the domestic market, said Rajesh Jain CEO Panacea Biotech.