The bill, if passed by parliament, will create a government agency to fix and monitor the standards of cleanliness, medical expertise and ethics of fertility clinics.
Two years after it was first mooted, India is close to finalising a draft bill to regulate the country's surrogacy industry.
Though worth 28.4 billion rupees (HK$3.4 billion), the industry is still unregulated, leaving the surrogate mother open to exploitation by middlemen and the child to abandonment if the commissioning parents renege on the agreement.
One provision, aimed at protecting the baby against rejection by foreign couples by insisting they deposit a bond, has aroused mixed reactions. The bond will be used to raise the baby born to the surrogate if the couple decide not to take the baby home.
"This measure has been made necessary because of the controversial Australian couple who rejected a baby boy but took the boy's twin sister home," said Dr Vishwa Katoch, secretary of the Ministry of Family Welfare's health research department.
Katoch, who has helped to draft the Assisted Reproductive Technologies Bill, was referring to an Australian couple whose Indian surrogate gave birth to healthy twins in November 2012.
They reportedly told the Australian High Commission in the Indian capital that they already had a son and wanted a girl to "complete" their family.
According to the Australian media, a senior Australian judge said earlier this month that the couple could face investigation for abandoning the boy. It is thought a childless Indian couple adopted the boy.
Kishwar Desai, a UK-based novelist who studied the Indian surrogacy industry for her 2012 novel Origins of Love, said she was unsure whether the provision for a bond would secure a good life for an abandoned child.
"Mere money will hardly make a difference, because we don't have a secure structure to look after the child if something does go wrong. The money is all very well but who raises the child? Does the baby go to an orphanage? If not, where? That's a more important issue," she said.
Hari G. Ramasubramian, a legal expert on surrogacy, said the bond might make surrogacy unviable since most foreigners came to India because it was much cheaper than elsewhere.
"Though the government hasn't yet fixed the bond amount, it will have to be around US$40,000-50,000 which, even for India, isn't much because it has to cover the baby's entire life. [But] if you add this to the cost of surrogacy, many couples won't be able to afford it," he said.
Ramasubramian welcomed the Australian judge's comment on the couple facing a possible investigation. He believes they should not have been allowed to leave the baby boy behind. "Instead of making new laws, let's enforce the ones we have. We have a law against the abandonment of a child but the government chose not to invoke it then," he said.
The bill, if passed by parliament, will create a government agency to fix and monitor the standards of cleanliness, medical expertise and ethics of fertility clinics.
Another proposed change is that foreign couples cannot come for a surrogate baby on a tourist visa, as they do at present, but will have to apply for a medical visa.
Katoch said he hoped the bill would be tabled in the next session of parliament which begins on July 21.
The only issue that still had to be thrashed out among the different ministries, he said, was whether singles can seek surrogacy or only married couples. It is estimated India has over 3,000 fertility clinics and they manage between 2,000 and 3,000 surrogate pregnancies every year.
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