Print Friendly, PDF & Email

AIR spotlight summary on “India-US collaboration for development in third world countries”.



AIR spotlight summary on “India-US collaboration for development in third world countries”.


  • “The Millennium Challenge Cooperation” is a government agency of the US which recently signed an agreement with the Development Partnership Administration of the Ministry of External Affairs of India. Under this agreement both India and US will work together and fund for country led solutions for reducing poverty through sustainable economic growth in those countries.
  • This is called as Triangular cooperation where two countries provide developmental assistance to a third country and work together and cover many areas and sectors. India is expanding the development cooperation activities bilaterally not just with the nations but also with organisations like World Food Programme (WFP), UNDP and other UN agencies.

India’s Developmental Assistance

  • India has been active in the development cooperation activities for many decades. In the last 15 years these activities have expanded in many areas and the numbers have also increased. The activities can be classified into three areas.
  1. Proving line of credit: In the last 15 years India has provided about 200 lines of credit to 65 countries and half of these are provided to Africa.
  2. Capacity Building Programmes: roughly about 10,000 officials and others come from various developing countries to about 47 institutions in India and avail training programmes.
  3. Grant Assistance Projects: These are being implemented in Afghanistan, Nepal, Bhutan, Sri Lanka, Africa etc. These are important for India’s Foreign and Security policy.
  • India has emerged as a significant player not just by receiving aid, but providing developmental assistance to other countries. India calls it as sharing developmental experience with other developing countries.

India’s assistance to Africa

  • After successful hosting of India-Africa summit in India, India’s outreach to the African continent as a whole has gone up. We had visits by the Indian Prime minster, President and Vice-President to Africa. Many see Africa as a place where both India and China are competing in building infrastructure, or economic partnership.
  • Traditionally India’s development assistance is concentrated on the neighbourhood mainly in South Asia and later extended to South-East Asia. In the last 10-15 years these activities have been extended to Africa particularly with more emphasis after India-Africa Summit. Most of the developmental aid to Africa is in the form of lines of credit, but there are also grant assistance projects. More than half of the lines of credit projects are in the area of infrastructure, railways etc. Most of these activities are in the form of South-South Cooperation.
  • Compared to other western nations the developmental assistance from the countries like India is non conditional and it is demand based. But 70% to 80% of project inputs have to be sourced from India by which India is promoting its own Industries and business.
  • There are large development needs in African region. Africa provides opportunities for trade and investment for India.

India’s assistance to its neighbours

  • India’s Neighbourhood First Policy emphasises on neighbourhood nations before we venture further out. Bhutan is a major recipient of Indian grants and has partnership in hydropower area. India invested heavily in hydro electric projects and India is the highest buyer of electricity from Bhutan. It is a win-win situation for both the countries where India is developing certain sector in Bhutan and also providing market for the sector in India. This is a kind of an example which can be emulated in many other countries.
  • Nepal is another country where India has been generous. India had been one of the largest donors or we were one of the first to reach Nepal during the recent earth quake. India-Nepal relations had some stress and strain despite India’s generosity.
  • In large number of countries wherever we provide developmental assistance our relations have improved like in Afghanistan, Central Asia, many African countries and even in our neighbourhood. But there are other foreign policy and strategic issues which influence our bilateral relations.
  • India and US have assisted in Infrastructure development in Afghanistan. Afghanistan is one example where both nations have contributed positively and Afghanistan has benefitted from this assistance. Some of the major developmental projects which India has implemented are Parliament building, Salma Dam project, zaranj delaram road project and power transmission line project. These are shining examples where in a very difficult situation Indians were able to implement those projects. The impact is much more than many of the western projects. Since these were implemented by Indian agencies, the cost of those projects was relatively less. Therefore there is lot of good will about India in Afghanistan.

Growing China’s presence in the region

  • Recently the Chinese president visited Dhaka and provided billions of credit and many people compare it with what India provides. In terms of numbers china can always provide more. India and China are growing in the same areas and therefore there are certain amount of competition and conflict. China is the largest trading partner with India’s neighbourhood and building many infrastructural projects. India cannot match with the kind of infrastructural projects which china is building like CPEC or OBOR projects.
  • Both India and China will continue to work not just in our neighbourhood but also in many parts of the world. There is lot of scope where both countries can work together within BRICS and SCO when India becomes full member.