India US Collaboration for Development in Third World Countries

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TOPIC: General Studies 2

• Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
• Effect of policies and politics of developed and developing countries on India’s interests

India and the US have signed a MoU to collaborate in the fields of developmental activities and aid in third world countries. The MoU has been signed between the Millennium Challenge Corporation (MCC) and Development Partnership Administration (DPA) of the ministry of external affairs of India. Under it, both countries will work on grants which will fund country led solutions for reducing poverty and sustainable economic growth in those countries.

As per the MoU, the two countries would collaborate on exchange of information and experience in sectors or issues pertaining to project development or implementation in partner countries.

The bilateral MoU is a part of the series of agreements that were signed by India to engage with the USA in a pro-active manner. Some of the agreements signed between India and the USA in recent years are –

• In January 2017, a Memorandum of Understanding was signed between the Indian Computer Emergency Response Team (CERT-In) and the US-CERT to facilitate closer cooperation in the field of cyber security.
• In December 2016, India signed a Rs 5000 crore defence deal with the USA to buy 145 M-777 Ultra-Light Howitzers under the Foreign Military Sales Programme.
• In August 2016, both the countries signed the Logistics Exchange Memorandum of Agreement (LEMOA). The LEMOA will enable both countries to use each other’s bases for repair and replenishment of defence supplies.
• In July 2016, a bilateral agreement was signed by both the countries. The agreement allows India to purchase four Poseidon-8I (P8I) long-range maritime surveillance and anti-submarine warfare aircraft’s from the USA.
• In July 2016, six bilateral agreements were signed after summit level talks between Indian Prime Minister Narendra Modi and US President Barack Obama to enhance cooperation in a wide range of areas including anti-terrorist operations and wildlife conservation.

India has been active in development cooperation for many decades but in last 15 years, these activities have expanded in many areas.

1. Line of credit– India has provided about 200 days line of credit to 65 countries in last 15 year. Half of these lines of credit are in Africa.
2. Capacity building programmes– 10000 officials come from various developing countries to 47 institutions in India. There are 250 major training programmes
3. Grant assistant project– it is being implemented in Afghanistan, Bhutan, Nepal, Sri Lanka, Africa etc.

India is expanding the development cooperation activities bilaterally with nations as well as organisations such as UNDP and FAO. The whole area has become important part of foreign security policy. In 2014, there was an agreement between India and USAID and now between India and USA. In USAID agreement, two areas were identified- agriculture and women empowerment. The agreement with USA is wider and can cover many areas and factors. India is not only receiving the help from other countries and organisations but also providing the assistance received. Thus, India does not call it developmental assistance as it is just sharing developmental experience from other developing countries. It is rather called development partnership. The activities done by India is around 2-3 billion USD every year.

India’s outreach to third world countries

Neighbourhood

Many dynamics work in favour of bilateral relations between two nations. Aid and grants is one of the components of building better relations with other countries. Overall, with large number of countries, relations have been improved. There are other foreign, political, economic, policy issues etc that influence bilateral relations. The Neighbourhood First policy is being pursued which emphasises on neighbour nations.

Bhutan- It is a major recipient of grants, aids and a partner in hydropower with India. Bhutan and India share warm and strong relationship since many decades. It is one country where India invested heavily and buying hydroelectricity from the same. It is win-win for both countries where India helps in development and also creates market for it.

Nepal- India is generous in help when it comes to Nepal- it is largest in donating and first to help during disasters. But India and Nepal have their politically stressed areas.

Afghanistan- India has done lot of infrastructural projects and so has USA. It is one example where India and USA have contributed positively and Afghanistan is benefitting. There is huge amount of developmental assistance that has come in last 15 years.

India has implemented crucial projects in difficult situations. Cost of projects is relatively less but impact of projects has been greater. Hence, there exists goodwill about India in Afghanistan.

Bangladesh- Last year, Chinese President waived off lot of credit. It is often compared with what India provides. In terms of numbers, China will do more and India is growing in same area. So competition and conflict is bound to happen. China is building lot of infrastructure projects but India cannot match infrastructure projects that china is building. China is major trading partner to many countries so it needs connectivity also. India is building wherever useful and required like in Bangladesh, SL, etc.

Traditionally, India’s development activities was more concentrated in neighbourhood mainly South Asia and then extended to South East Asia.

Now in last 15 years it has been also extended to Africa and more emphasis after India-Africa summit. India’s outreach to African nations has increased. There have been visits by President, PM and Vice-President. Most of the developmental activity is in form of line of credit. There is also large component of softloans and grants. 60-70% of line of credit is in areas of infrastructure.

Most of the activities are in form of South-South cooperation. Even India has developmental issues but India is helping other developmental countries by sharing its own experience. In the process, the line of credits, unlike other western countries, and development cooperation activities are non-conditional. India does not prescribe which kind of project should be implemented. Instead, it is demand based.

India and China in Africa

African region is the fast growing region which requires development support. It also provides economic opportunities for trade and investment, plenty scope for both. Africa is looked as a place where both India and China are competing in matters of infrastructure, economic growth from grassroots. China has also implemented many infrastructure projects in Africa. But in some countries, there is resentment regarding how Chinese projects have been implemented there. So India should learn from Chinese mistakes and not repeat the same. Though there is some competition between the two in terms of increasing the scope of influence.

Connecting the dots:

• Do you think India and US are coming closer to act as a joint force against China? Elucidate