The Postmortem of USAID and What it Means for India

On the night of November 26, 2008, Mumbai’s skyline was lit up by the horror of an attack that would shock the world. Ten heavily armed militants from the Pakistan-based terrorist group Lashkar-e-Taiba (LeT) infiltrated the city, killing over 170 people and injuring more than 300 in a series of coordinated assaults.

The attacks, which targeted prominent hotels such as the Taj Mahal Palace and the Oberoi Trident, the Chhatrapati Shivaji Terminus train station, a hospital, and a Jewish center, left an indelible scar on India’s collective memory. 

One of the more troubling revelations about the financing of LeT and other extremist groups has been the alleged link between such organizations and various charitable foundations.

The Falah-e-Insaniat Foundation, a notorious front for LeT, was founded by Hafiz Saeed, the mastermind behind the Mumbai attacks, and has long been designated a terrorist organization by the U.S. government.

Saeed’s network however extends beyond overt terrorist activity; it also extends to organizations that claim to serve humanitarian causes, such as the Michigan-based charity, Helping Hand for Relief and Development (HHRD). In fact, it has been reported that many of HHRD’s events in Pakistan were sponsored by the Falah-e-Insaniat Foundation. 

HHRD, while positioned as a charity with a mission to provide aid to the underprivileged, has received funding from some unlikely sources. The HHRD in fact received $110,000 in funding from the U.S. Agency for International Development (USAID) in the years preceding the attacks. 

The fact that such a connection went unnoticed raises troubling questions about the U.S. government's humanitarian aid practices—and how those funds could have been funneled into the hands of organizations with ties to terrorist groups.

This stark reality sets the stage for understanding the broader implications of USAID's role on the global stage. The recent salvo against the USAID by President Donald Trump has signaled a major shift in U.S. foreign policy and aid strategy.

While Trump has publicly described USAID as being run by "radical lunatics,” Department of Government Efficiency (DOGE) Director Elon Musk has called it a “criminal organization” and has suggested dismantling the agency altogether or folding it into the State Department. 

Aiding Democracy and Revolution

The U.S. Agency for International Development (USAID), an independent agency established by Congress in 1961, has, on paper, played a crucial role in channeling ‘U.S. humanitarian aid and development assistance’ to countries in need.

With an annual budget of $42.8 billion, it’s supposed to be responsible for fostering economic development, promoting education, and aiding in disaster relief across the globe.

USAID's work, from providing healthcare in sub-Saharan Africa to strengthening democratic institutions in Eastern Europe, has been a cornerstone of American soft power.

However, at the heart of the recent curtailment of USAID is the longstanding suspicion and strong accusation that the agency has been a tool of the CIA. 

Critics argue that USAID’s humanitarian mission has often overlapped with covert U.S. intelligence operations, particularly in regions where the Washington has strategic interests.

The charge is that agencies like USAID and its sister organization, National Endowment for Democracy (NED), have been used as instruments of U.S. foreign policy, advancing Washington’s interests under the guise of "democracy promotion." 

The NED's role in "color revolutions"—such as in Ukraine, Nicaragua, and Mongolia—has raised questions about whether such interventions are truly democratic or merely the extension of U.S. influence.

In particular, the U.S. government’s efforts to ‘promote democracy’ have frequently been framed as thinly veiled excuses for regime change or influencing the outcome of foreign elections. 

American ‘interventions’ in places like Bangladesh, more recently, have only led more people to believe that these so-called “democracy programs” are merely tools of U.S. imperialism. 

In countries like India, where USAID’s funding and influence have been substantial, these concerns are even more pronounced. 

Concerns for India

India’s relationship with USAID is particularly relevant when discussing the agency’s potential dismantling. 

India has long been one of the largest recipients of U.S. development aid. Between 2010-2011, the U.S. was responsible for over $650 million in aid to India, covering everything from health initiatives to education and disaster relief.

Given India’s strategic importance in the region and its growing influence on the global stage, USAID’s programs have been a cornerstone of bilateral ties between the U.S. and India in the past.

While many of these funds supported legitimate development work, there were concerns about the influence of foreign NGOs on India’s domestic politics, with some fearing that such organizations could undermine national sovereignty.

Critics pointed to instances where NGOs, particularly those funded by the U.S. such as the Joshua Project, collected sensitive data or promoted subversive agendas. This issue became more prominent in India as a growing number of local groups raised alarms about the potential political motivations behind such foreign-funded activities.

Another example is the Organized Crime and Corruption Reporting Project (OCCRP), which received funding from USAID and has repeatedly targeted Indian business magnate Gautam Adani. Through its investigative reports, OCCRP has painted a picture of crony capitalism in India, attempting to link Adani’s rise to PM Narendra Modi, without presenting definitive evidence to back these claims.

Similarly, USAID is a partner of Freedom House, a global watchdog that has persistently criticized India’s democratic credentials. Year after year, Freedom House has downgraded India’s status, shifting it from a full democracy to an "electoral autocracy" in its annual rankings. 

These moves, critics argue, are part of a broader attempt to set a narrative against India’s democratically elected government, painting it as authoritarian and undermining its legitimacy on the world stage. 

This pattern of funding organizations that push political agendas makes USAID appear convincingly on the side which would prefer a colour revolution in India. 

The Postmortem of USAID

The potential dismantling or restructuring of USAID raises broader questions about the role of U.S. foreign aid in a changing world. 

Some see the U.S. withdrawal from global commitments under the Trump administration as a sign of America's decline, while others view it as a necessary step to focus on core national interests and avoid a more chaotic retreat later.

In either case, it's clear that we’re witnessing the end of an era. The Trump Administration, often seen as chaotic, might be more in tune with the changing world order than its predecessors. Acknowledging the rise of a multipolar world and adjusting U.S. ambitions accordingly is messy but perhaps better than clinging to a fading global primacy.

This shift doesn’t mean the U.S. will stop being a disruptive force. Without the need to uphold a "rules-based order," the U.S. may become even more aggressive, acting solely in self-interest. The empire may be ending, but U.S. influence remains a powerful force. 

This transformation marks a significant shift in international relations, leaving America’s vassals caught off guard. 

While USAID’s closure may seem like a win, India must stay vigilant about what replaces it. U.S. influence may change form, but it will likely persist in new ways.

Ultimately, the debate over USAID’s future is not just about foreign aid—it’s about the future of U.S. foreign policy itself.

As the U.S. reconsiders its role on the world stage, the outcome could shape global diplomacy for years to come, particularly in the Indo-Pacific, where U.S.-India relations are becoming increasingly pivotal.