India’s Development Cooperation with the Global South: Rethinking Modalities in a Changing Global Order

Explained for UPSC Aspirants – By Suryavanshi IAS

📌 Introduction

India’s development partnership with the Global South has significantly evolved over the last decade. What started primarily as Lines of Credit (LoC) under the Indian Development and Economic Assistance Scheme (IDEAS) has today expanded into a more multi-modal, balanced engagement framework.

With budgetary stress, debt crises, and shrinking Official Development Assistance (ODA) globally, India is now at a crossroads — rethinking its role, responsibilities, and mechanisms of engagement. The emergence of Triangular Cooperation (TrC) is fast becoming a critical pillar of this new paradigm.

🇮🇳 India’s Expanding Development Footprint

✅ Key Highlights:

· India’s development assistance grew from $3 billion in 2010–11 to around $7 billion in 2023–24.

· Key modalities of engagement include:

o Capacity building (e.g., ITEC)

o Technology transfer

o Market access

o Grants

o Concessional finance (LoCs)

LoCs have remained India’s primary tool, enabling several infrastructure, energy, and education projects in Asia, Africa, and Latin America.

⚠️ Why India is Re-evaluating the LoC Model

📉 Finance Ministry Red Flag (2025-26 Budget):

India is now cautious about LoCs due to:

· Global sovereign debt risks

· Unpredictable capital markets

· Burden of interest subsidies absorbed by the Indian government

· Challenges in repayment capabilities of partner countries

⛳ LoC model loses relevance in times of global liquidity crises and poor debt sustainability.

🌍 Global Aid Landscape in Decline

🔻 ODA Shrinking Fast:

· 2023 ODA stood at $214 billion

· Projected 2024 ODA: just $97 billion
➤ A 45% cut

❌ Key Global Trends:

· Collapse of USAID and downsizing of FCDO (UK)

· OECD-DAC monopoly on aid norms being challenged

· Deepening debt crisis across developing countries

· SDG financing gap increased from $2.5 trillion (2015) to $4 trillion (2024)

Without alternate models, SDG goals may remain elusive.

🤝 Triangular Cooperation: A Promising Alternative

🔎 What is TrC?

TrC involves collaboration between:

· A traditional donor (Global North),

· A pivotal South-South partner (like India),

· A recipient partner country (usually in Global South)

🟢 Why TrC Works:

· Shares costs, risks, and expertise

· Avoids neo-colonial conditions attached to ODA

· Promotes co-created, locally relevant solutions

· Builds horizontal partnerships, not hierarchies

📈 Evidence of Growing TrC Impact

📊 Data Trends:

· Non-DAC flows grew from $1.1 billion (2000) to $17.7 billion (2022)

· Preliminary TrC estimates: $670 million to $1.1 billion

🌐 Successful Global Examples:

· Japan–Indonesia in ASEAN countries

· Germany–Brazil in Mozambique

· Germany–India: Signed Joint Declaration (2022)
➤ Projects in Cameroon, Ghana, Malawi, and Peru

🇮🇳 India’s Role and the Global Development Compact

At the Voice of Global South Summit (2024), PM Modi introduced the idea of a Global Development Compact (GDC), aiming to:

· Balance all five engagement modalities

· Foster collective action

· Shift from credit-heavy aid to diverse cooperation models

🛠️ Innovative Initiatives:

· Global Innovation Partnership (GIP) with the UK

· Expanded partnerships with Germany, US, France, EU under India’s G-20 Presidency

🧩 Challenges Ahead

Despite its promise, TrC is not without challenges:

· Lack of unified global framework for TrC

· Asymmetric expectations between partners

· Difficulty in monitoring outcomes and ensuring accountability

Still, the model offers resilience and inclusivity unmatched by traditional ODA.

🧠 UPSC Relevance: Important Themes for GS Papers

GS Paper II (Governance, IR):

· South-South cooperation

· Triangular cooperation as alternative diplomacy

· Role of India in Global South and G-20 diplomacy

GS Paper III (Economy, Infrastructure):

· Financing for development

· Role of concessional finance and LoCs

· Impact of debt crisis on global development

✅ Probable Mains Questions

1. Q. India’s development cooperation is evolving from aid to partnerships. Discuss in the context of South-South and Triangular Cooperation models. (GS II – 2025 Expected)

2. Q. Lines of Credit as an instrument of India’s foreign policy face new global financial constraints. Critically evaluate. (GS II or GS III)

3. Q. Shrinking ODA and rising debt crises across the Global South require new financing models. How can India lead in this transformation?

📚 Prelims Pointers

· IDEAS Scheme – Indian Development and Economic Assistance Scheme

· Voice of Global South Summit (VoGS) – India-led initiative since 2023

· Triangular Cooperation (TrC) – Involves North-South-South partnerships

· Global Innovation Partnership (GIP) – India–UK development model

· ODA Providers Club – DAC under OECD

✅ 1. UPSC Mains GS Paper II – 2020

❓Q. “What are the challenges in the production and distribution of crude oil in India? Discuss how the Hydrocarbon Exploration and Licensing Policy (HELP) attempts to address these.”

🧠 Explanation:
While this is energy-related, it touches upon India's external engagements — especially in the energy sector with other developing countries. India often extends LoCs to Global South partners for oil exploration, pipelines, and refineries (e.g., in Mozambique, Sudan, Sri Lanka). The answer should:

Explain oil production/distribution issues (low reserves, high import dependency).

Introduce HELP and how it aims to streamline exploration and attract investment.

Link to India’s South-South energy partnerships, if relevant.

✅ 2. UPSC Mains GS Paper II – 2022

❓Q. “Discuss the role of India in South-South Cooperation with reference to the past two decades.”

🧠 Explanation:
This question directly targets India’s role in the Global South. Your answer should include:

Definition of South-South Cooperation (SSC).

India’s initiatives: ITEC, LoCs under IDEAS, grant-based aid, training, etc.

Institutions: Development Partnership Administration (DPA) under MEA.

Specific examples: Afghanistan Parliament building, railways in Africa, solar tech to island nations, etc.

Recent shift from LoC to multi-modal engagement (as seen in the text).

Mention of Triangular Cooperation (TrC) and GDC if relevant.

✅ 3. UPSC Mains GS Paper II – 2023

❓Q. “India’s foreign aid strategy is shifting from aid to development partnership. Examine.”

🧠 Explanation:
A very important question that overlaps heavily with the content you shared. Structure your answer as:

Introduction: Define the difference between aid vs partnership.

Historical trend: India’s earlier aid (financial grants, loans).

Now: Focus on capacity building, technology transfer, market access, LoCs, Triangular Cooperation.

Mention IDEAS, Voice of Global South Summit, G-20 advocacy, TrC with Germany/UK, etc.

Challenges (sovereign debt, capital unpredictability).

Suggest a balanced Global Development Compact (GDC) approach as articulated by PM Modi.

✅ 4. UPSC Mains GS Paper III – 2021

❓Q. “Energy security is critical to India’s economic progress. Discuss the role of Indian government policies in this context.”

🧠 Explanation:
Again, closely connected to development cooperation because India’s foreign LoCs include energy infrastructure abroad. You can:

Define energy security.

Mention India's oil diplomacy, energy-focused LoCs, international solar alliance, and partnerships with Africa and Latin America.

Tie in India’s external energy investments under its development strategy.

✅ 5. UPSC Mains GS Paper II – 2019

❓Q. “'India’s neighbourhood policy has shifted from SAARC to BIMSTEC.' Critically examine.”

🧠 Explanation:
While this is regional, it links to how India is refocusing development cooperation in its immediate neighbourhood, often using LoCs, grants, and capacity-building projects. Include:

How SAARC stagnated and India used bilateral LoCs to invest in Bhutan, Nepal, Maldives, etc.

Role of IDEAS and India’s pivot to BIMSTEC for strategic and development partnerships.

Use TrC or Global South dynamics if needed to frame India as a “leading partner”.

💡 Bonus Practice Question (Predicted for 2025)

❓“With shrinking Official Development Assistance (ODA) and rising debt stress across the Global South, India must reimagine its development cooperation model. Discuss in light of Triangular Cooperation and the Global Development Compact.”

📌 How to Use This in Your UPSC Prep:

Prepare model answers using introduction–body–conclusion (IBC) format.

Quote real examples (e.g., Germany–India in Africa, GIP with UK, ITEC stats).

Always mention India’s role as a voice of the Global South (especially post-G20 Presidency).

For Prelims, revise:

IDEAS Scheme

Development Partnership Administration (DPA)

Triangular Cooperation (TrC)

ITEC, LoCs

SDG 2030 funding gap data

✍️ Conclusion

In a time of shrinking aid, rising debt, and global realignments, India’s approach must move beyond just LoCs. By promoting Triangular Cooperation and balanced modalities, India not only supports sustainable development in the Global South but also establishes itself as a credible, inclusive, and empathetic development partner.

🖋️ Prepared By:
Suryavanshi IAS Editorial Team
“For aspirants who don’t just learn — they lead.”

Thursday, July 3, 2025