India’s neighbourhood aid policy: opportunities and challenges

Abstract: Over the past few decades, India‘s status has changed at the global level specifically because of its high economic growth, steady integration with the international economy, growth in business processing, induction of nuclear weapons and enhancement of national defence strategy. But the question occurs, what does it mean in terms of its foreign relations with its immediate neighbourhood? There can be several stories about the success of India as a global rising power but does it changes the scene of regional power struggle. There are several misconceptions, missing elements, incoherence and vagueness when it comes to the foreign policy of India to its neighbours particularly in aid policies.

India‘s aid policy towards South Asian neighbours has been driven by economic, historical and political reasons. Political factors include the need to ensure that anti-India forces such as Taliban or LTTE do not capture the political sphere. Historical reasons include cultural similarities and the shared colonial experience which makes a moral pressure on India to act as a big brother in the region not as a bully. Economic factors include the economic benefits of expanding Indian multinational corporations (MNCs), India‘s energy interests and long term natural resource sustainability.

In this context, this paper focuses on the India‘s role in the growth and development of its neighbourhood. It also analyses the misconceptions about India‘s aid policies and politics. Finally, the paper offers suggestions to address those misconceptions.

Post description

  • Publication year: 2015
  • Content type: Brief
  • Form of cooperation: Comprehensive (Lines of credit, grants and loans, and technical assistance).
  • Cooperation context: Multilateral
  • Region (country): South Asia
  • Sector: Multisectoral
  • Institution (publication): CUTS International
  • Author (and co-authors): Saurabh Kumar & Aparna Sharma 
  • Keywords: South-South cooperation; overview of India’s overseas aid; South Asia; politics of neighborhood aid; India’s economic and strategic interests
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