The future of the United States Agency for International Development (USAID) is uncertain as America’s President Donald Trump has taken steps to freeze its funding and restructure the agency.
Shortly after Trump’s return to office, USAID announced that thousands of employees would be put on leave, and staff were recalled from missions worldwide. The administration is also planning to merge USAID with the U.S. Department of State, aligning foreign aid spending with Trump's "America First" policy.
Recent developments show Trump plans to retain fewer than 300 staff members of the agency’s global workforce of over 10,000.
Trump has publicly criticised USAID’s spending, calling it “totally unexplainable” and advocating for its closure. Elon Musk, who is involved in the White House’s initiative to downsize the federal government, has also condemned the agency, labeling it a “criminal organisation”. While neither Trump nor Musk has provided concrete evidence to support these claims, the effort to shut down USAID is expected to face legal challenges.
The move has sparked widespread concern about its impact on humanitarian and development programmes, including those in India.
What is USAID?
USAID is the "lead international humanitarian and development arm of the US government". The agency plays a crucial role in providing assistance to other countries, primarily through funding non-governmental organisations (NGOs), foreign governments, international organisations, and other US agencies.
These efforts often focus on specific programmes aimed at alleviating poverty and providing education, healthcare, and other services.
USAID was established by an executive order from President John F. Kennedy, following the passage of the Foreign Assistance Act by the US Congress in 1961. The act mandated the creation of a single agency to oversee foreign aid.
The agency emerged in the context of the ‘Red Scare’, specifically in response to the United States' fear of a communist takeover in Latin America after the Cuban Revolution of 1959. The initiative was touted to promote democracy and economic development in the region, focusing on education, housing, infrastructure, and regional stability.
In fiscal year 2023, USAID managed over $43 billion in funds, assisting approximately 130 countries, including Ukraine, Ethiopia, Jordan, the Democratic Republic of Congo, Somalia, Yemen, Afghanistan, Nigeria, South Sudan, and Syria.
With the aid of its thousands of “institutional support contractors”, USAID executes more than 60 missions around the world.
How Much Aid Has India Received From USAID?
USAID has been operating in India for over 70 years, playing a pivotal role in supporting the country’s healthcare, education, sanitation, and efforts to combat climate change.
In the past four years, India has received $650 million from USAID, bringing the total funding allocated to the country since 2001 to $2.86 billion.
In 2023, India received around $140 million in USAID funding. For the said fiscal year, USAID earmarked $55 million for health initiatives, $18 million for environmental efforts, and $7.8 million for social infrastructure, as detailed on the U.S. government’s Foreign Assistance website.
Interestingly, the funding that India has received from the U.S. over the years has followed an inconsistent pattern. Under President George Bush, India received an average of $142 million annually until 2008.
This dropped to around $90 million per year under Obama and further declined to $87 million in President Donald Trump’s first term. However, funding increased again under President Joe Biden, averaging $163 million annually.
What Did USAID Fund In India?
The agency’s assistance has been crucial in driving key projects forward. Some of which are-
- Health projects- USAID has made a significant impact on India’s healthcare, collaborating with the government to tackle issues like maternal and child mortality, tuberculosis, and HIV. Since 1990, USAID has helped save over 2 million children’s lives by reducing deaths from pneumonia and diarrhea.
The agency has also supported India’s Tuberculosis elimination campaign by training healthcare providers and improving care access. During the COVID-19 pandemic, USAID committed nearly $13.1 million for testing, surveillance, public health communication, and provided 200 advanced ventilators to India.
- Education- USAID has backed several educational initiatives in India, focusing on literacy, teacher training, and school improvement. Through partnerships with organisations like the Kaivalya Education Foundation and STIR Education, it helped enhance leadership and teaching skills in over 250 government schools and impacted 14,657 teachers, benefiting 5,64,000 students.
Its Nurturing Early Literacy Project reached over 90,000 children across Rajasthan, Maharashtra, and Karnataka, while the Right to Read programme improved reading skills for one million students in 5,000 schools. USAID also collaborated with Room to Read India, promoting reading habits in 2,46,000 children through public school libraries.
- Water, Sanitation, and Hygiene (WASH)- USAID backed the Indian government’s Swachh Bharat Abhiyan (Clean India Mission), assisting over 3,00,000 people in gaining access to toilets. As per its data, 25,000 communities achieved open defecation-free (ODF) status.
The agency also secured over $5 million in private sector funding to implement water, sanitation, and hygiene (WASH) solutions across the country.
- Agriculture- USAID claims to have supported more than 1,30,000 farmers by encouraging better farming practices, offering crop insurance, and providing weather data to mitigate climate-related risks.
The agency also collaborated with India’s weather services companies like Skymet Weather Services Private Limited, to expand a network of automatic weather stations, delivering localised weather updates and risk-reduction tools to farmers via SMS.
How Much Does USAID Cost The US Government?
As the Trump administration works to reduce the USAID, misleading and false information has been circulating on social media to back the effort. Much of this content is being shared by the administration and Elon Musk.
The posts often question the funding of specific projects and organisations, making unsupported claims that the money was misused, including an allegation that the agency was a form of "money laundering".
Despite these claims, the reality of USAID’s funding tells a different story. In fiscal year 2023, the agency managed more than $40 billion in appropriations, which accounted for less than 1% of the federal budget, according to the Congressional Research Service.
A significant portion of this funding was allocated to support Ukraine in its fight against Russia's invasion, along with disaster relief and various humanitarian and health programmes worldwide.
For instance, Trump also reiterated an unfounded claim on Truth Social that billions had been “stolen at USAID, and other agencies” and given to “fake news media” to promote Democrats. He specifically alleged that Politico received $8 million.
However, this claim misrepresents federal spending on subscriptions. According to the official data, federal agencies collectively spent more than $8 million combined in payments for Politico subscriptions and products in 2024, including $24,000 by USAID.
These subscriptions, such as Politico Pro and E&E News, provide policy tracking and exclusive reporting. Federal agencies also subscribed to other outlets like The New York Times and The Wall Street Journal.
Other falsehoods include claims about funding for controversial projects like condoms in Gaza, and extravagant grants for programmes in places like Egypt.
These claims have been debunked by multiple media outlets, which have confirmed that USAID’s funding supported legitimate and transparent initiatives, including disaster relief, global health programmes, and humanitarian aid, with no evidence of the alleged misconduct.
What's Next?
While USAID’s contribution is a small part of India’s total budget, its targeted support has been valuable. If the funding freeze continues, India may need to find alternative ways to support these initiatives, such as increasing domestic investment or partnering with private organisations.
Trump’s move raises concerns about how developing nations relying on USAID assistance will adapt if the funding stops permanently.