Impact of USAID Funding Cuts on India and Global Health

Context

• On January 20, 2025, the Trump administration issued an Executive Order terminating U.S. foreign aid, leading to the dismantling of USAID (United States Agency for International Development).
• This move has halted key developmental initiatives in several countries, including India, significantly affecting sectors like healthcare, digital infrastructure, environmental protection, and sanitation.
• USAID has been a major contributor to India's development programs for over two decades, playing a crucial role in public health, economic growth, and Indo-Pacific security initiatives.
• In 2022, USAID was the fourth-largest provider of Official Development Assistance (ODA) to India, contributing $228 million, following Japan ($2.97 billion), the EU ($383.5 million), and Germany ($235 million).

Key USAID-Funded Programs Affected in India

• 5G Open Radio Access Network (O-RAN): A project under the Indo-Pacific strategy aimed at building secure digital infrastructure.
• Clean Air and Water Projects: Programs focused on reducing pollution and improving environmental quality.
• Sanitation and Public Health Initiatives: Support for urban and rural sanitation infrastructure.
• Healthcare Programs: Major disruptions in tuberculosis (TB), HIV/AIDS, maternal health, and infectious disease control programs due to funding withdrawal.

USAID’s Financial Contribution to India

Total USAID Disbursement to India Since 2001

• USAID has provided $2.8 billion in Official Development Assistance (ODA) since 2001.

Recent Trends in USAID Funding (2022-2024)

• 2022: $228 million (highest annual disbursal in nearly two decades).
• 2023: $175 million.
• 2024: $151 million (as of December 19, 2024).

Economic Support Fund Surge

• 2022: $148 million allocated.
• 2023: $81 million allocated.
• The rise in funding was primarily driven by COVID-19 recovery efforts and economic support.

Historical Trends in USAID Allocations

• 2001-2002: Majority of funds directed to Food Aid and Commodity Assistance.
• 2003-2021: Shift towards Health and Population Programs, including polio eradication, maternal health, HIV/AIDS, and tuberculosis control.
• 2022-2024: Focus expanded to include COVID-19 response and economic recovery initiatives.

Comparison with Past Peaks

• 2006: $175 million (previous peak in annual disbursal).
• 2022-2024: First time since 2001-08 that annual aid exceeded $100 million consistently.

Impact of USAID Funding Cuts on India

Healthcare Programs at Risk

1. Tuberculosis (TB) Program

   • The Breaking the Barriers initiative, a USAID-funded TB awareness and treatment program in Karnataka, Telangana, Bihar, and Assam, is set to shut down.
   • USAID had allocated $7 million (2022-23) for this project through the Karnataka Health Promotion Trust (KHPT).

2. HIV/AIDS Prevention Programs

   • USAID has been a key funding partner in PEPFAR (President’s Emergency Plan for AIDS Relief).
   • The defunding of USAID may lead to:
     • Increased HIV transmission rates.
     • Higher mortality rates due to loss of critical healthcare funding.

3. Global Healthcare Risks

   • Experts emphasize that wealthy nations have a responsibility to support healthcare in developing countries.
   • With 50% of the global population lacking access to healthcare, the USAID funding cuts threaten global health security.
   • The reduction in funds could undo decades of progress in eradicating infectious diseases.

Legal Battle Over Foreign Aid Cuts

1. February 13, 2025

   • A U.S. Federal Court issued a stay order, temporarily blocking the Trump administration’s decision to halt foreign aid.

2. Trump Administration’s Appeal

   • The U.S. government appealed to the Supreme Court, arguing that 5,800 foreign aid projects had been reviewed and 500 were retained.

3. March 5, 2025

   • The U.S. Supreme Court, in a 5-4 verdict, rejected the Trump administration’s appeal, effectively upholding the lower court’s stay.

Conclusion

• USAID’s contribution to India has been vital in strengthening healthcare, infrastructure, and economic development.
• The termination of U.S. foreign aid will have severe repercussions, especially for public health programs in India and other developing nations.
• Although legal battles continue, India must explore alternative funding sources to sustain its critical healthcare and development programs.