Over a fifth of USAID’s $2.9 billion assistance to India since 2001 came in last four years

USAID funding to India to get impacted

Civilian foreign aid body USAID's assistance to India, a large part of which came after the pandemic, may dry up under US President Donald Trump's administration.

A Moneycontrol analysis of USAID's funding pattern shows that over a fifth of its aid came to India in the last four years, as funding ramped up after the Covid pandemic. Over the last four years, India received $650 million from USAID, bringing its total allocation to India since 2001 at $2.86 billion.

While India received over $150 million from USAID in 2024 (until December), the agency's allocation of $175.7 million for 2023 was its highest since the 1980s. The annual external assistance from USAID hit its highest level at $228.2 million during 2022.

USAID Shutting Down?

On February 3, staffers of the agency were told to work from home, and not report to the headquarters in Washington DC. Later, billionaire and Tesla founder and 'Special Government Employee' Elon Musk said that Trump, during a conversation, had ordered the agency to be shut down.

This comes as Trump 2.0 prepares to 'move, reorganise, integrate and abolish' certain sections of United States Agency for International Development (USAID), with the website of the agency already offline since the morning of February 4, 2025.

Not Just a Trump Policy

While the thrust has been to streamline USAID's operations, analysis shows that funding to India has been reduced in the past as well, during the global financial crisis of 2008, and then during President Barrack Obama’s first term.

Under President George Bush, USAID averaged $142 million in funding to India, during his two four-year terms until 2008. Under the Obama administration, the annual USAID funding to India saw a decline to $89.8 million. In 2016, during his first term, President Donald Trump carried forward the Obama legacy and dispensed $87.1 million per annum to India. Later, in 2020, President Joe Biden ramped it up again by averaging $162.6 million during his four years in office.

Health Shock, Infra Loss

A freeze on USAID assistance is expected to have the greatest impact on healthcare projects in India, which received two-thirds of the organisation's allocation for the country, over the past four years. Health accounted for 69% or $120 million of the $175.7 million assistance provided to India by USAID in 2023.

Environmental projects too are expected to receive a setback, with $9.6 million in funds given in 2023, as will Governance, which had a $14 million corpus. Governance includes spending on civil society groups as well as social infrastructure and services.

Changing Aid Composition in India

Data also shows that the nature of USAID funding has changed over the years. While Healthcare remains the most significant recipient of USAID, within Health, Basic Health services account for a higher proportion of funds compared with Maternal and Child Health, since the pandemic.

As India has become more food secure over the years, food security’s share has gone to nil from nearly 8% in 2009.

Similarly, the funding for Agriculture in India is now just 13% of what was allocated in 2014, whereas Education and Infrastructure have witnessed a rise in spending. Governance and Social Sector spending by USAID in India had also seen a growth since 2014, with the share rising from 0.6% to 8%.