U.S.AID Policy Reversals under Trump: India Expresses Concern as China Seizes Opportunity

In the world of international development, two significant events have recently caught the attention of global observers. Firstly, reports have emerged that Starlink, Elon Musk's satellite internet company, faced an inquiry by USAID [United States Agency for International Development]. Meanwhile, the US government's foreign aid programme, managed by USAID, has undergone changes that may have far-reaching implications.

Established in 1961, USAID was initially inspired by President John F. Kennedy with the aim of globally expanding democracy and free markets. Over the years, its objectives have been diverse, covering areas such as disaster relief, poverty alleviation, technical cooperation, socio-economic development, health, education, democracy, environment, and "bilateral interests". The bulk of USAID funds have traditionally been allocated to sub-Saharan Africa and Europe & Eurasia.

However, under recent US administrations, there have been significant changes. A notable shift has been towards having aid programs managed directly by the State Department instead of USAID. This transformation was spearheaded by the US Department of Government Efficiency (DOGE), led by Elon Musk, which began examining American government expenditures in January 2021.

The restructuring of USAID has raised concerns about the future of foreign aid. The planned reduction of USAID employees from 10,000 to 294 could globally cripple development assistance, potentially affecting millions of HIV patients and disrupting clinical trials for various diseases. This reduction could lead to legal challenges and immediate negative impacts on low-income nations, particularly in southern Africa. Such a move could also damage America's global reputation and influence, potentially allowing China to exploit the vacuum and gain influence.

India, on the other hand, has a long history of foreign aid. Indian public sector companies like Rail India Technical and Economic Service (RITES) use training and aid abroad to open doors for future business opportunities. India's foreign assistance to countries like Nepal dates back to the 1950s, and its foreign aid is calibrated based on a country's strategic importance, including the need to isolate it from Chinese or Pakistani influence.

In response to these changes, India established the Development Partnership Administration (DPA) within its Ministry of External Affairs in 2012, modelled after USAID. The DPA consolidated existing mechanisms of foreign aid to include lines of credit, grants-in-aid for development projects, capacity building, humanitarian assistance, and cultural and heritage partnership.

The USAID agenda has always included a pro-democracy sub-theme, and allegations exist of a US role in the change of government in Bangladesh. More recently, President Donald Trump spoke in Miami about alleged $21 million funding for enhancing voter turnout in India, which was later found to be possibly intended for Bangladesh.

The Indian Technical and Economic Cooperation (ITEC), established as the core of India's foreign aid program, continues to play a vital role in its foreign policy. As the world watches the evolving landscape of foreign aid, it remains to be seen how these changes will impact global development and geopolitical dynamics.