India’s Development Cooperation with the Global South
India's development cooperation with the Global South has been increasing over the years, with significant efforts to expand engagement and almost doubling financial aid from around $3 billion in 2010-11 to approximately $7 billion in 2023-24.
Key Modalities of Engagement
- Capacity-building programs
- Technology transfer
- Market access
- Grants
- Concessional finance through Lines of Credit (LoC) under the Indian Development and Economic Assistance Scheme (IDEAS).
- The emphasis on LoCs may need refocusing due to global liquidity crises affecting interest rates and repayment capabilities.
Challenges and Global Financial Landscape
Rising geopolitical complexities and a decline in global development finance impact development aid. The collapse of USAID and the decline of foreign aid agencies highlight this emerging crisis.
- The availability and leverage of resources are hindered by a decline in Official Development Assistance (ODA), projected to decrease to $97 billion, down from $214 billion in 2023.
- The Organisation for Economic Co-operation and Development (OECD)'s Development Assistance Committee (DAC) has been influential in dictating economic and political programmes.
- The investment required for the Sustainable Development Goals (SDGs) has surged from $2.5 trillion in 2015 to over $4 trillion in 2024.
Emerging Cooperation Models
New mechanisms like Triangular Cooperation (TrC) and collaborations with non-DAC countries are emerging as promising solutions.
- Flows from 19 non-DAC countries have risen from $1.1 billion in 2000 to $17.7 billion in 2022.
- Examples include collaborations between Japan and Indonesia in ASEAN economies and Germany and Brazil in Mozambique.
Triangular Cooperation (TrC) Model
TrC brings together a traditional donor from the Global North, a pivotal country from the Global South, and a partner country, promoting shared learning and co-creation of solutions.
- Preliminary data collection suggests TrC engagements range between $670 million to $1.1 billion.
- Improved infrastructure, such as regional energy grids, enhances digital connectivity and access to education and health.
- India and Germany signed a Joint Declaration of Intent in 2022 for TrC projects in Africa, Asia, and Latin America.
- Projects are currently being implemented in countries like Cameroon, Ghana, Malawi, and Peru.
During India’s G-20 presidency, TrC was further emphasized with expanded collaborations involving Germany, the United States, the United Kingdom, the European Union, and France, spanning various sectors and modalities.