Politics

India Shows Split Personality as Emerging Donor

By Dweep Chanana ⋅ March 25, 2009 ⋅  Email this post ⋅  Print This Post ⋅ Post a comment

India has been the largest recipient of foreign aid since the end of World War II. In 1992, total aid received was estimated at USD 55 billion since 1951. That year it reached a record high of USD 3.9 billion. But India has also long had a foreign aid program of its own. Till recently, that program received very little attention (see this prior post). However, in recent years there have been marked shifts in the size, focus, and strategic thinking behind India’s foreign aid program.

In a new article (by yours truly) in the latest issue of the Economic and Political Weekly (India as an Emerging Donor), I have sought to understand both the size of India’s giving and its strategic drivers and strengths. Some interesting points highlighted below.

• In 2008, India allocated approximately INR 26.7 billion (USD 547 million at current Jan 2009 exchange rates) to aid-related activities.
• In addition, it also approved USD 704 million in lines of credit through the EXIM Bank. By March 2008, USD 2.96 billion in LOCs had been approved – much of it for Sub-Saharan Africa
• The aid program has changed in two critical ways. First, the aid periphery has expanded beyond South Asia. Second, India’s giving is increasingly bilateral and thus focused more on projecting “hard” rather than “soft” power.

For more and an analysis of the implications, see the article online.

Tags: donor, Foreign Aid & Civil Society, Politics, South Asia