Foreign Aid or Strategic Influence? Examining USAID’s Operations in India

• USAID’s aid operations in India have long been scrutinised—are they aimed at development or serving U.S. geopolitical interests?
• It was recently discovered that approximately 86 media outlets and journalists received funding from USAID to spread anti-Indian narratives in their publications.
• Various reports indicate that USAID-supported NGOs contributed to political dialogue formation in India in an indirect manner.
• India’s increased monitoring of foreign-funded organizations, particularly under the Foreign Contribution Regulation Act (FCRA), reflects the country’s concerns about foreign influence in its domestic affairs.

USAID: Development Partner or Instrument of U.S. Foreign Policy?

For decades the United States Agency for International Development (USAID) has been a key player in India, funding projects in health care, education, energy and economic development. Although many of these initiatives have fostered progress, concerns about transparency, accountability, and prominent geopolitical influence persist. There are concerns regarding the exploitation of the agency as a tool to further U.S. interests influencing India’s domestic policy through clandestine forces.

To promote creative public health and sustainability projects, USAID collaborates with Indian government agencies, and non-profit and private organizations in areas such as Women’s empowerment, TB prevention, and renewable energy. However, lately, there has been growing public scrutiny of USAID’s financial operations and their conformity with India’s national interests.

USAID provides generic descriptions of its operations but does not disclose fund distribution, organizational costs, or project selection. This obscures funding transparency, operational efficiency and the end use of the funds towards declared purposes.

USAID and India’s Economy: PL 480 -A Lifeline or a Noose? The Evanescent Economic Leverage of USAID over India^[1]

The India-US PL 480 Agreement (Public Law 480) emerged in 1954 to help India combat its food shortages under the leadership of Former Prime Minister Jawaharlal Nehru. The wheat import arrangement appeared to be favourable, as it allowed for rupee payments rather than currency conversion. However, the grains purchased were distributed based on the recommendations of The Ford Foundation India, USOM (US Operations Mission), and USAID India (after its establishment) and the funds were deposited in the account of the U.S. Technical Cooperation Mission, Delhi. These funds were used, among other things, to fund private enterprises (either US companies or Indian companies reselling agri-products of these US companies) through USAID as per the Cooley Amendment, enabling these companies to dominate the Indian agricultural market.

The grains purchased were distributed based on the recommendations of The Ford Foundation India, USOM (US Operations Mission), and USAID India (after its establishment) and the funds were deposited in the account of the U.S. Technical Cooperation Mission, Delhi

Later, after almost a decade of fleecing and when concerns were raised regarding the inferior quality of the wheat delivered,  India attempted to renegotiate terms in 1966. the U.S. forced it to devalue its currency by 37%, exacerbating its debt and inflation while benefiting American exports. This exemplifies the strategic influence of the U.S. under the garb of benevolent aid through USAID.

USAID, CIA, and the Vanishing Spy: The Curious Case of Rabinder Singh

Rabinder Singh, a top R&AW officer, was kept under surveillance after he was found photocopying documents not related to his work and suspected to have been working for one of his relatives, a U.S. citizen who has worked for over two decades with USAID, who Indian intelligence suspects are a front for the CIA. Later, he is suspected to have defected to the US via Nepal in 2004. This warrants concerns to examine whether such institutions are completely benevolent or being used as Trojan Horse.^[2]

USAID has long been suspected of transgressions, such as political influence and intelligence collecting.

Behind the Funding: USAID, NGOs, and the Question of Sovereignty

Various reports indicate that USAID-supported NGOs contributed to political dialogue formation in India in an indirect manner. Multiple media houses claim reports from the USAID-funded Organized Crime and Corruption Reporting Project (OCCRP) have been used as ammunition against Indian business tycoons and the Indian government to create instability in the country. Rahul Gandhi, the Leader of Opposition, along with other prominent opposition leaders have reportedly used these reports to foment disorder during parliamentary discussions. Doubts ensue upon the use of such development aid as leverage for political influence.^[3]

Moreover,  the USAID-supported ‘World Vision India’ is disreputed of religious proselytization under the guise of Humanitarian Work. Despite its neutral stance, USAID’s funding choices appear to favour organizations that possibly lean towards disturbing Indian cultural ideals and national interests.^[4]

Rabinder Singh, a top R&AW officer, was kept under surveillance after he was found photocopying documents not related to his work and suspected to have been working for one of his relatives, a U.S. citizen who has worked for over two decades with USAID.

India Today^[5] reported that the Pakistan-based Falah-e-Insaniat Foundation (FIF), a Terror front organization for Hafiz Saeed’s Lashkar-e-Taiba (LeT) which was responsible for the 26/11 Mumbai terror attacks, was funded by the USAID which was blind to its own government’s ban on the FIF. The funds, according to reports, were funnelled through Helping Hand for Relief and Development (HHRD)—a Michigan-based Muslim charity that has long been accused of ties to South Asian jihadist groups and terror financiers.

Furthermore, the USAID provided full funding for Al Qaeda terrorist Anwar al-Awlaki, who was killed in a US drone strike in 2011, to attend Colorado State University. These uncover the shortfalls in USAID’s vetting procedures, and expose the misuse of  American taxpayer dollars, directly or indirectly, on terror-linked organizations.

Meanwhile,^[6] USAID has financial connections to the Joshua Project—an organization accused of gathering sensitive data on Indian communities under the pretext of development research. This research entailed collecting sensitive demographic and cultural data, identifying vulnerable individuals, and designing large-scale conversion campaigns, particularly in tribal and economically disadvantaged communities. The Joshua Project’s database has served as a roadmap for aggressive missionary expansion, culminating in population manipulation and social upheaval throughout numerous states.^[7]

Recently, Elon Musk-led Department of Government Efficiency (DOGE) announced that it has cancelled American assistance of $21 million, through the USAID-funded CEPPS, intended to increase “voter turnout in India”^[8]Raising the question as to why an American organization is involved in the electoral process of a democratic foreign country.

Geopolitical Incentives: USAID as a Foreign Policy Trojan Horse

USAID’s aid operations in India have long been scrutinised—are they aimed at development or serving U.S. geopolitical interests? History suggests the latter, especially with concerns over data security in healthcare and external influence on policies. Similarly, while USAID’s push for renewable energy seems beneficial, it aligns with Washington’s strategic goal of reshaping India’s energy landscape.

The strategy gradually lessens India’s dependency on Middle Eastern energy sources and Russian oil by actively supporting solar and wind projects, frequently including U.S.-affiliated companies^[9]. This brings India’s energy policies closer to Western geopolitical objectives. Additionally, USAID’s energy initiatives in India complement Asia EDGE (Enhancing Development and Growth through Energy), the U.S. government’s Indo-Pacific Energy Initiative.^[10]

The double standards of “foreign aid” become even more evident when USAID’s track record in other nations is considered. In Bangladesh, USAID has been allegedly linked to covert regime-change operations, funding student organizations and revolting against Prime Minister Sheik Hasina’s Government resulting in her ouster from the country.^[11] In India, this involvement takes the form of sponsoring NGOs that oppose government policies, shape local narratives, and, in certain circumstances, jeopardize national security.

India’s Response: The Imperative for Vigilance Against Foreign Interference

India’s increased monitoring of foreign-funded organizations, particularly under the Foreign Contribution Regulation Act (FCRA), reflects the country’s concerns about foreign influence in its domestic affairs. The 2020 revisions increased the government’s authority and supervision over non-governmental organizations that receive funding from overseas sources. The FCRA now forbids the transfer of foreign monies to other organizations and requires that all foreign contributions be accepted in an account with the State Bank of India in New Delhi.

Many NGOs,^[12] including well-known ones like Greenpeace India and Amnesty International, as well as academic institutions like the JNU, have had their FCRA licenses revoked owing to the vigilance of the government. India is taking a careful approach, as evidenced by the tightening of FCRA restrictions, to protect its democracy and make sure that foreign countries cannot use external financial inflows as a way to interfere in domestic affairs.

India’s Atmanirbhar Bharat initiative seeks to lessen reliance on foreign aid by improving domestic skills. FCRA changes align with this purpose, ensuring that foreign donations do not jeopardize sovereignty or security. Regulating foreign funds in politics, media, and education is critical because unregulated influence can impact public opinion and political outcomes.

FCRA changes align with this purpose, ensuring that foreign donations do not jeopardize sovereignty or security. Regulating foreign funds in politics, media, and education is critical because unregulated influence can impact public opinion and political outcomes.

The fifth pillar of democracy—the media—plays a significant role in society, and if these media outlets are compromised, the people will be exposed to anti-Indian sentiments. It was recently discovered that approximately 86 media outlets and journalists received funding from USAID to spread anti-Indian narratives in their publications.^[13]The stringent measures taken by the government to safeguard the sovereignty are often denigrated by many of these ‘independent media houses funded by the USAID’ as restrictions on freedom of speech in India as though out of their resentment and frustration of being curtailed

Education is extremely vulnerable to foreign influence, with pupils being targeted by Western propaganda that can undermine cultural identity. The Bangladesh coup, sparked by student protests, exemplifies this risk. In India, IIT Kanpur was investigated in 2016 for foreign-funded aeronautical research, raising security concerns, while Jamia Millia Islamia’s FCRA license was evaluated in 2019 due to potential ideological impact.^[14]

The fifth pillar of democracy—the media—plays a significant role in society, and if these media outlets are compromised, the people will be exposed to anti-Indian sentiments. It was recently discovered that approximately 86 media outlets and journalists received funding from USAID to spread anti-Indian narratives in their publications.^[15]The stringent measures taken by the government to safeguard the sovereignty are often denigrated by many of these ‘independent media houses funded by the USAID’^[16] as restrictions on freedom of speech in India as though out of their resentment and frustration of being curtailed.

References:

• _{^[1] https://x.com/IamTheStory__/status/1887892401349431672}
• _{^[2] https://frontline.thehindu.com/the-nation/article30223280.ece}
• _{^[3] https://economictimes.indiatimes.com/news/politics-and-nation/bjp-claims-link-between-rahul-gandhi-george-soros-and-occrp-calls-him-traitor-of-the-highest-order/articleshow/116001146.cms?from=mdr}
• _{^[4] https://www.opindia.com/2025/02/exclusive-church-world-vision-billions-usaid-crores-india-conversion-jihadis-naxals-modi-govt/}
• _{^[5] https://www.indiatoday.in/world/story/donald-trump-usaid-funded-pakistan-ngo-link-to-terrorist-organisation-lashkar-e-taiba-let-falahs-e-insaniat-2675197-2025-02-05}
• _{^[6]https://nypost.com/2025/02/11/us-news/usaid-reportedly-bankrolled-al-qaeda-terrorists-college-tuition-unearthed-records-show}
• _{^[7] https://x.com/Namami_Bharatam/status/1888825063191015619}
• _{^[8]https://www.business-standard.com/politics/elon-musk-led-doge-nixes-21-million-us-grant-for-voter-turnout-in-india-125021600532_1.html}
• _{^[9] https://www.reuters.com/business/energy/indian-state-refiners-may-buy-mideast-spot-oil-replace-russian-shortfall-2024-12-24/?utm_source=chatgpt.com}
• _{^[10] https://www.usaid.gov/energy/asia-edge}
• _{^[11] https://x.com/republic/status/1890403046552920309}
• _{^[12] https://x.com/UnSubtleDesi/status/1887883616186683399}
• _{^[13] https://x.com/eOrganiser/status/1891855780678152457}
• _{^[14] https://economictimes.indiatimes.com/news/india/ima-iit-delhi-jamia-milia-among-6000-entities-whose-fcra-licence-deemed-to-have-ceased/articleshow/88632094.cms}
• _{^[15] https://x.com/eOrganiser/status/1891855780678152457}
• _{^[16]https://swarajyamag.com/world/the-postmortem-of-usaid-and-what-it-means-for-india}

Pranav S & Vadiraja B

Pranav S is a Project Assistant at the Energy Department, Government of Karnataka with an MA in Public Policy. Vadiraja B is a Bengaluru-based freelance contributor with a curious mind. He has a degree in commerce, an aesthete and with an interest in almost anything. Views expressed are the authors own.