Indian Politics & Policy Volume 1, Number 2, Fall 2018 | Page 86

Foreign Assistance in India’s Foreign Policy: Political and Economic Determinants
climate change, and terrorism among
other things.
The second meeting between
India and African Regional Economic
Communities was held in November
2011. India has MOUs with four such
entities—COMESA, ECOWAS, EC-
CAS (Economic Community of Central
African States, established 1985),
and SADC. South Africa joined the
BRIC grouping, making it BRICS, in
April 2011 and the fifth IBSA summit
was held in Pretoria. Africa is the second
largest recipient ($9.23 bn) among
regions (after South Asia) of the $22.52
bn in LOCs extended by India till June
2018.
India’s attractiveness to Africa
lies in its ability to produce soft infrastructure
like IT goods and services
and pharmaceutical products relatively
cheaply and some see it as offering an
alternative to Chinese assistance and
trade (Naidu 2008). Access to African
oil and gas resources for long-term energy
security and as an alternative to
the volatile Middle East also remains
a goal of India’s Africa policy (Naidu
2008). Assistance also complements the
growing footprint of Indian companies
in Africa and helps promote trade and
investment, including in minerals.
Development assistance to Africa
is not a case of immediate economic
benefits or of short-term security competition
with China but more of investment
in long-term relationship-building
with a resource-rich continent with
close to 50 UN General Assembly votes
that promises to be increasingly important
in the future in both economic and
political terms. All African countries
have been visited by Indian ministers
during the Modi government’s tenure
and Indian Ocean maritime security
cooperation has also been discussed
with several African states. 13
Discernible Patterns
Among the major recipients of
Indian assistance, the following
patterns are discernible:
First, in the cases of Bhutan and
Nepal, India bulks large in their trade,
inward investment, and tourism profiles,
while they are of marginal significance
in India’s trade and outward investment
profile. They matter to India’s
security calculations in a major way as
they are neighbors with porous borders
and buffer states between India
and China. Hence, India’s assistance to
them is primarily motivated by political
and security considerations but is
important to the recipients in economic
terms. An important point here is that
India’s assistance is widely distributed
in the form of a large number of small
projects, thus maximizing popular
awareness and impact. Also that India
being the principal destination for
higher studies and training creates an
alumni network in both countries. India’s
assistance is one of long-term commitment
as signified by the fact that it
comes from its Plan budget as well as
Non-Plan budget for decades.
Second, Bangladesh and Sri Lanka,
which are neighbors in which India
perceives competition for diplomatic
influence from Pakistan and China, are
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