Indian Politics & Policy Volume 1, Number 2, Fall 2018 | Page 60

Foreign Assistance in India’s Foreign Policy: Political and Economic Determinants
Introduction: Key
Questions about India as
an Emerging Donor
Emerging economies are also
emerging as aid donors and
players in the international aid
architecture and in the use of aid as a
foreign policy tool. India’s development
partnership policy has been little studied
for a country that is a major emerging
market and regional power and has
given over $34 billion (bn) in aid since
2004. This paper attempts a detailed account
and analysis of India as an emerging
foreign aid donor, or development
partner as it prefers to call itself while
rejecting the former term (I will refer
to Indian assistance rather than aid
henceforth). It analyzes India’s development
partnership program within the
framework of Indian foreign policy and
relations rather than that of only the development
aid literature. India is not a
member of the Development Assistance
Committee (DAC) of the Organization
for Economic Cooperation and Development
(OECD), the traditional coordination
mechanism of the developed
country donors and the international
aid regime. This paper will analyze India’s
development partnership policy in
the context of its foreign policy by asking
and analyzing five key questions:
1. How much? Aid numbers have always
been prone to massaging as
donors attempt to show their largesse.
A good handle on India’s
assistance numbers is an essential
first step.
2. To Whom? What have been the
allocations by country and/or region?
To what extent is Indian
assistance directed to the “near
abroad” versus more geographically
distant countries? Is the assistance
directed to the poorest countries
or to resource-rich countries?
3. For what? What are the purposes
to which this assistance is directed?
What are the sectors and types
of projects being assisted? Is there
a discernible philosophy regarding
economic development in Indian
assistance policy?
4. How? What are the modalities and
institutional mechanisms through
which Indian assistance works? Is
it through grants or loans? Is it tied
to imports from the donor? Which
arms of the government give the
assistance and how is it coordinated
and administered? Is India’s
assistance strategically planned,
either for promoting development
or for promoting its interests, or it
is ad hoc, case by case, and evolving?
5. Why? What are the motivations
of this assistance? Is it to secure
access to scarce natural resources,
commercial expansion, or for
geo-strategic goals or in response
to geo-political competitive dynamics?
Is it coordinated with India’s
expanding trade and investment
relationships? This paper
links India’s program to its foreign
policy toward all its major recipients
with a section on each.
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