G20: India’s development model can lead the way

India has repeatedly been dubbed as an emerging donor in the international development literature, but the country has a long history of development cooperation. As a newly independent country with monumental challenges, India recognised its international responsibility and was keen to share its development experience. India announced 70 scholarships for students from Asia and Africa to study in India in 1949, and the Indian Technical and Economic Cooperation (ITEC) was launched in 1964. The founding principles of India’s development cooperation were anti-colonialism, third-world solidarity, and sharing of development experience. These principles were of great normative significance because the international aid architecture was heavily dominated by the West, whose development model often deepened existing inequalities among countries and created dependencies. However, given India’s dependence on foreign aid at the time, these programmes received little attention.

Things changed dramatically in the early 2000s when India substantially expanded its development cooperation programme on the back of high-growth rates in the post-liberalisation era. The India Development and Economic Assistance Scheme was launched in 2003, under which Delhi extended concessional credit lines to developing countries for projects such as energy transmission lines, roads, power plants and irrigation systems. So far, India has approved credit lines worth $27.7 billion to developing countries in Africa, Latin America, and Asia.

The ITEC programme was also expanded significantly, and its budget is now estimated at Rs 220 crore. Currently, about 98 Indian institutions offer courses in agriculture, engineering and technology, the climate crisis and environment, food and fertiliser, and Artificial Intelligence to participants from 160 partner countries. In addition, the e-Vidhya Bharati and Arogya Bharati were launched in 2018 to provide free tele-education and continuing medical education to 4,000 African students and 1,000 African medical professionals every year for the next five years.

A key feature of India’s development cooperation is its ability to provide low-cost development solutions. For instance, under the Solar Mama programme, illiterate women are trained to become solar engineers and electrify villages in remote districts. So far, over 800 solar mamas from 78 countries have been trained and they have electrified 50,000 homes in 500 villages. On the other hand, much of the aid provided by western countries such as the United

States, the United Kingdom, Canada, and Denmark is recycled back to their countries because their administrative costs are high, and they hire expensive consultants who are often out of touch with the real development challenges of poor countries. The cost of Indian goods and services is lower than that of developed countries, so more goods and services can be provided with one dollar in India. Therefore, India’s development cooperation budget is much higher in purchasing power parity terms.

India’s approach to development cooperation has several other advantages. Unlike the Organisation for Economic Cooperation and Development, India does not have a prescriptive donor-recipient relationship with its partners. Instead, India’s development initiatives are demand-driven, meaning the recipient country identifies the project based on its needs and priorities. Because of the principles of mutual benefit, no conditions and respect for sovereignty, India is often bracketed with China in the literature on international development cooperation. However, there are significant differences. Chinese development cooperation is typically characterised by large State-led infrastructure projects, often using natural resources as collateral. In addition, China is severely criticised for the unsustainability of its loans and its poor record in local employment generation, and maintaining environmental and labour standards. India is not facing a backlash on any of these fronts.

Moreover, India’s development initiatives are closely related to the Sustainable Development Goals (SDGs), although it does not explicitly mention the achievement of SDGs as the objective of its development cooperation.

As India assumes the G20 presidency in December, it should aspire to play a more significant role in international development and call for a greater initiative in implementing SDGs. Given the massive challenges that the world is facing due to the after-effects of the pandemic and the ongoing Ukraine-Russia war, India must use the G20 platform to shift the focus of attention back to development and showcase its development model globally, as it offers significant advantages over other models. The current challenges demand a new thrust in international development cooperation and new ways of working from all development actors. The Indian model has a lot to offer.