Nepal, Jan. 30 -- India has used economic assistance as a major instrument of its foreign policy, mainly in the larger pursuit of building and consolidating national power. Theoretically, aid is given under two circumstances, namely when there is a trade gap (export minus import) or a foreign exchange gap and when there is a resource gap (savings minus investment).
Despite the fact that India itself has had huge trade and resource gaps, it consistently doled out economic assistance to countries across the continents. Besides strategic and political stability objectives, the pursuit of economic and commercial interests has played a very critical role in determining the direction, contents and nature of its foreign aid policy.
In the five y...