Recent executive actions have initiated the dismantling of the U.S. Agency for International Development (USAID) and raised concerns about the future of U.S. development and diplomatic engagement in South Asia. As the Trump administration, under the influence of powerful figures like Elon Musk, has worked to radically reshape—or abolish—USAID, policymakers and experts are discussing whether those changes will create long-term stability or deepen strategic rivalries in a region already beset by competing influences.
Founded in 1961, USAID has long served as a primary tool of U.S. foreign policy, providing humanitarian assistance, developing economies, and advancing governance reforms globally. Across South Asia, USAID’s projects — encompassing everything from public health initiatives and disaster relief to agricultural and education programs — have been fundamental in stabilizing vulnerable societies and countering the influence of rival powers.
For instance, USAID has contributed to improved health systems, reduced the spread of infectious diseases, and improved food security in countries like India, Pakistan, Bangladesh, and Nepal. These initiatives are not only lifesaving but also a tool of soft power—reinforcing U.S. assumptions of credibility within a region rife with chronic poverty and geopolitical competition.
But recent developments have upended this longstanding role. The agency’s workforce has been slashed from more than 10,000 employees to just a few hundred and thousands have gone on administrative leave. Influential figures like Elon Musk have demanded that USAID “die,” painting it as an ineffective “criminal organization.”
This sudden upheaval is not just a domestic bureaucratic issue — it is a crisis with larger implications in South Asia. The administrative confusion has brought essential processes for renewing life-saving assistance to a halt, leaving humanitarian partners without guidance. The disruptions in USAID are already sowing uncertainty among international NGOs and local partners that rely on its funding and expertise.
Implications of Abolishing USAID
The possible elimination or drastic scaling back of USAID in South Asia poses substantial risks:
Erosion of U.S. Soft Power
For years, USAID has been a bedrock of U.S. engagement in South Asia, building goodwill and countering rival influence — mainly from China. With the U.S. suddenly cutting back its development assistance, regional players may come to rely even more on China’s extensive infrastructure and investment efforts (e.g. the Belt and Road Initiative) to fill the vacuum. Such a realignment would not just erode American soft power but it would also tilt regional alliances in the direction of geopolitical rivals.
Humanitarian and Public Health Risks
Disruptions in aid hit particularly hard on South Asia’s dense populations and fragile public health systems. USAID’s work in disease prevention and emergency response is critical — especially as we continue to prevent outbreaks of diseases such as dengue, malaria and other emerging pathogens. The agency’s collapse has already halted operations required to consider humanitarian aid waivers, threatening delays that could worsen crises and cause unwarranted loss of life.
Economic and Social Disruption
USAID has been focused on development in South Asia and has made investments in infrastructure, education, and agriculture that have helped spur growth and raise living standards across South Asia. The sudden withdrawal of these supports could unwind developmental gains, catalyze economic instability and even stoke social unrest. Disruptions in these areas are not only of local concern but could also erode broader regional stability — a core U.S. strategic interest.
Moreover, these actions threaten to undermine the institutional capacity required for efficient crisis management. Discussions to place USAID under the State Department are already underway. But such integration — if done without the type of deliberate oversight it requires — risks undermining the operational autonomy that has enabled USAID to deliver timely and effective responses to emergencies.
Recommendations for a Measured Reform
Instead of an all-out effort to abolish USAID, policymakers should pursue a reform process that responds to legitimate complaints about ineffectiveness while restoring the essential functions of the agency:
Engage in Congressional Oversight
USAID is an agency mandated by the Congress through the Foreign Assistance Act and augmented by ensuing legislation. Congress should be involved in any major restructuring to ensure changes are constitutionally sound and consistent with U.S. foreign policy goals. At the Brookings Institution, recent reports have been emphasizing that unilateral executive actions threaten long-lasting legal and operational upheaval that could be far more expensive than the inefficiencies they seek to eradicate.
Focus on Efficiency and Accountability
Any reforms should eliminate waste and duplication while preserving the agency’s capacity to provide life-saving services. This may include updating administrative procedures, deploying digital mechanisms for enhanced oversight, and optimizing project implementation. With increased transparency and accountability, USAID can continue to be a model for effective foreign assistance.
Preserve Operational Independence
Upholding USAID’s operational independence — while bringing the agency into better alignment with the State Department — provides the right approach for a nibbler and context-appropriate response to crises. Such a hybrid model which encourages collaboration without subsuming USAID completely — could ensure that the agency retains its capacity to respond quickly to crises, protecting both humanitarian outcomes and U.S. strategic interests.
Reaffirm U.S. Commitment to Global Stability
The USAID in regions as critical as South Asia remains a crucial factor for counteracting rival influences and contributing to long-term stability. Policymakers should not see reform as a ticket to reducing resource expenditure vis-a-vis strategic engagement, but as an occasion to reassert U.S. commitments to development and humanitarian values.
The Future of U.S. Foreign Assistance in South Asia
There are profound implications for South Asia in this aggressive drive to dismantle USAID. USAID has historically been a bedrock of U.S. soft power in the region through extensive contributions to public health, economic development, and regional stability. Abolishing or significantly downsizing the agency risks a strategic vacuum that adversaries — China especially — are keen to fill. And the ongoing administrative instability risks undermining vital humanitarian services, potentially aggravating public health emergencies and economic collapse in some of the world’s most vulnerable populations.
Instead of an all-or-nothing approach, a gradual reform process is needed that increases efficiency, enshrines congressional oversight and protects operational independence. Such a strategy would protect the lives and livelihoods of millions in South Asia but would also protect U.S. strategic interests in a region where stability and soft power projection matter more than ever.
It is possible to strike a balance between necessary reforms and a firm commitment to effective foreign assistance that will allow the U.S. to preserve its credibility as a global leader and continue to pursue greater humanitarian and geopolitical goals in South Asia.
