India’s emergence as a source, rather than a recipient, of foreign aid, is a largely overlooked phenomenon in world affairs. As the country with the second largest aid programme in the global south, India is now more than ever engaged with the nations of the world, building bridges and relationships of lasting value.
This is no surprise, for India is turning increasingly outward as a result of our new economic profile on the global stage, our more dispersed interests around the world, and the reality that other countries, in our neighbourhood as well as in Africa, are looking to us for support.
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Economic Growth Boosts India’s Profile
India’s economic growth and entrepreneurial dynamism, both allowed to flourish only in the last 25 years, have created a different India, which therefore, relates to the world differently. ‘Material well-being is supreme,’ wrote Kautilya in the fourth-century BCE Arthasastra. Twenty-five centuries later, we may have returned to his timeless wisdom.
India’s economic growth has significantly added credibility to the country’s international profile. After decades of being portrayed as a poor and backward nation, India’s transformation into a global force on the back of its economic triumphs and its technological prowess is a new fact of life.
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Joining the League of Rule-Makers
There has been a profound reassessment across the globe of India’s international importance and future potential. New Delhi’s success in handling its internal problems, including secessionist movements, has also confirmed the perception of India as a serious power, with an anchor role in the sub-continent and wider region. We’ve been a rule-taker for long enough; it’s now time for us to join the rule-makers.
India’s generous aid programmes, its extensive international peacekeeping commitments, the personal stature of its previous and now present prime minister, and its indispensable role in the making of G-20 policy, all testify to a nation that has, in President Obama’s words, ‘emerged’ and is making a significant impact on international affairs.
The path to taking on more ambitious responsibilities on the global stage lies ahead. Approaches formulated at a time when India was a major recipient of foreign aid, and saw itself as a developing country needing to assert itself in the face of the hegemony of the former imperial powers, are no longer entirely relevant. India has weaned itself from the dependence on aid, preferring to borrow from multilateral lenders and, increasingly, from commercial banks.
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USP of India’s Aid Initiative
Today India gives as much aid as it receives, makes more foreign direct investments than it gets and is seen by other countries as a source of assistance, guidance and even security.
India’s aid programmes in its neighbourhood and in Africa have been characterised by a willingness to let the recipient set the terms, respect for the priorities and the culture of the recipients, and a focus on projects that promote self-reliance, economic growth and political democracy (including women’s empowerment).
Though some 75 per cent of India’s aid is tied to the provision of goods and services from Indian suppliers – an excusable condition for aid coming from a developing country – it has by and large been welcomed as helpful, less intrusive and less disruptive than other countries’ (the traditional donors’) aid programmes have tended to be. As such it now forms an essential part of India’s projection to the world.
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Putting Money Where the Mouth Is
This too echoes ancient Indian wisdom. A millennium-and-a-half ago, the great king Harsha declared: ‘Before, while amassing all this wealth, I lived in constant fear of never finding a storeroom solid enough to keep it in. But now that I have spread it in alms upon the field of happiness, I regard it as forever preserved!’
India has begun putting its money where its mouth used to be. At the 2015 India-Africa summit in New Delhi, the Indian government pledged $10 billion in Line of Credit (LoC) towards development projects to African countries doubling its commitment since 2011. It has now emerged as a significant donor to developing countries in Africa and Asia, second only to China in the range and quantity of development assistance given by countries of the global South.
The Indian Technical and Economic Cooperation Programme (ITEC) was established in 1964, but now has real money to offer, in addition to training facilities and technological know-how. Nationals from 156 countries have benefited from $825 million in ITEC grants, which have brought developing-country students to Indian universities for courses in everything from software development to animal husbandry.
In addition, India has built factories, hospitals and parliaments in various countries, and sent doctors, teachers and IT professionals to treat and train the nationals of recipient countries. Concessional loans at trifling interest rates are also extended as lines of credit, tied mainly to the purchase of Indian goods and services, and countries in Africa have been clamouring for them.
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Moving On from the Traditional Status of Donor
India remains by far the single-largest donor to its neighbour Bhutan, as well as a generous aid donor to Nepal, the Maldives, Bangladesh, and Sri Lanka as it recovers from civil war. India’s assistance programme in Afghanistan already amounts to more than $2 billion – modest from the standpoint of Afghan needs, but large for a non-traditional donor – and is set to rise further.
Where should India head from here? The advent of Sustainable Development Goals as the new paradigm for reducing global poverty and inequality, is one space where India could possibly contribute, although that will be a new space for Indian development assistance. It is also a space that would require considerably more money than India has committed to such international programmes in the past.
The other option is to continue to engage with our neighbours and regional partners, concentrating on its strengths of bilateral infrastructure and capacity development programmes. India has mostly received extremely positive feedback with regard to its international image and earned substantial goodwill. It is now looking to extend this positive experience by combining it with cultural exchange and soft power.
Being a Credible Donor Part of a Larger Vision
In my book Pax Indica, I had envisioned about:
- A democratic and pluralist India working for a world order that sustains and defends democracy and pluralism;
- A ‘multi-aligned’ India serving as one of the principal fulcrums of a networked globe, in which countries pursue different interests in different configurations;
- An India free of poverty, growing and engaging in trade and investment in and with the rest of the world, and upholding arrangements that make such trade and investment relationships possible;
- An increasingly prosperous India, prepared to share the benefits of its prosperity with other nations and lands on its periphery and its extended (land and maritime) neighbourhood;
- And a technologically savvy India, setting its sights on, and lending its expertise to, the management of outer space and cyberspace in the common interests of humanity.
Being a credible aid donor is a vital part of that vision, and it is one of the best consequences of India’s emergence as a global economic power.
(Former UN under-secretary-general, Shashi Tharoor is a Congress MP and an author. He can be reached @ShashiTharoor. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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