5.4. Foreign Aid from India

India has been one of the major receive of development aid. But over the last 3 years, India has has given more aid to foreign countries than it has received. In the financial year 2015-16 India gave Rs. 7719.65 crores as aid whereas it received Rs. 2,144.77 crore in aid from foreign countries and global banks

Development Aid to foreign countries not only serves economic objectives but also as a strategic tool.

♤ India wants to project itself as major economic power and rightful claimant to permanent membership to UNSC.

♤ Neighborhood First Policy: The neighborhood is the biggest recipient of aid from India. Bhutan for years have received the biggest chunk of Indian aid with Rs. 5,368.46 crores in 2015-16, primarily aimed at developing hydro-electric power. Also India is 2nd largest donor in Afghanistan.

♤ Ethnic Issues: In Sri Lanka, India is undertaking the construction of houses for rehabilitation of Tamil population displaced by nearly three decades long war.

♤ Soft Power: India offer aid to extend the reach of its soft power.

♤ Another major reason is to counter the influence of China in India’s neighborhood.

♤ South Asia is disaster prone and many countries in the regions can’t carry out relief work on

its own.