Trump freezes USAID funding: India’s education sector in danger or business as usual?

Following the Trump administration's executive order to halt most foreign aid, including that allocated to India, the US Agency for International Development (USAID) issued a temporary pause on new funding obligations. While this decision raised alarms in several sectors, including health, education, and environment, it is important to examine the actual impact this move will have on India’s education system. Given the already decreasing levels of US assistance to India over the past decade, the ramifications for education funding are expected to be limited.
As already mentioned, India’s education sector might not experience severe consequences from the reduction of USAID support. USAID has been active in India in areas such as primary education, teacher training, and literacy campaigns. However, its overall contribution to the education budget is relatively small in comparison to other domestic and international funding sources. Here, we explore the long-term trends of foreign aid to India, focusing on the education sector, and assess whether the current US funding freeze is likely to disrupt the country’s education progress.
USAID’s historical role in India’s education sector
USAID has been actively involved in India’s education sector since the 2000s, with a particular focus on improving literacy rates, supporting teacher training, and fostering educational infrastructure. While USAID’s educational assistance has been important, the scale of its financial commitment has always been modest in the context of India’s expansive education system.

From 2007 to 2024, USAID has funded various education-related projects, with a particular emphasis on improving early grade reading and teacher quality. A significant portion of this aid has been channelled into programmes aimed at enhancing the capabilities of primary school teachers, improving learning resources, and implementing technology-based solutions in classrooms. Additionally, specific projects supported by USAID have been critical in building scalable models for educational interventions, such as the "Scaling Up Early Learning" project and "School Excellence Programme."
Despite these contributions, USAID's direct financial contribution to India's education sector has consistently remained under a few million dollars annually. For instance, in 2020, USAID allocated approximately $7.7 million to education, which is a relatively small fraction when compared to India’s annual education budget, which is $1.54 billion dollars.
Declining trend of USAID’s contributions
US foreign aid to India has been steadily declining over the past decade, particularly after 2004 when the Indian government decided to reject foreign aid linked to conditions. As a result, by the end of the 2010s, the total USAID support for India’s education sector had already reduced considerably. For instance, USAID's contribution to education in 2017 stood at only $780,000, while the figure for 2018 was just $3.2 million, suggests their official estimate. This decreasing trend is consistent with broader geopolitical shifts and India’s growing economic stature, which has reduced its dependency on foreign assistance.
The current pause in USAID funding, therefore, should be viewed in the context of this gradual reduction in support, rather than as a sudden, dramatic change. As a result, experts in the development sector argue that the pause will likely have a minimal impact on India’s education initiatives, given the larger financial investments from the Indian government and other donors in this sector.
Government’s increasing role and private sector involvement
While USAID’s pause may have some effects on specific projects, the Indian government’s education initiatives remain robust and are funded primarily through domestic resources. For example, India’s National Education Policy (NEP), which came into effect in 2020, calls for substantial improvements in early childhood education, teacher training, and the digital transformation of classrooms. These reforms are being supported by the Indian government’s increasing allocation to education, which exceeds $100 billion annually. The NEP aims to boost learning outcomes for over 250 million school children, with an emphasis on foundational literacy and numeracy.
The private sector also plays an increasingly prominent role in supporting education in India. Several corporate entities, NGOs, and foundations have stepped in to address gaps in public education. Organisations like Room to Read, working in partnership with USAID, continue to operate independently and drive education programmes across India. Moreover, India’s rapidly expanding EdTech sector, valued at billions of dollars, further underscores the country’s growing capacity to support education outside of traditional foreign aid.
Education programs funded by USAID: What’s the impact?
Despite the limited overall financial support from USAID, some of its key educational programmes in India are noteworthy. For example, the USAID-funded "School Excellence Program" works with underperforming government schools in Gujarat, training thousands of teachers and impacting over 150,000 children. Similarly, the "Scaling Up Early Learning" project, which partners with Room to Read, aims to improve reading outcomes for hundreds of thousands of primary school children in several states.
With the funding pause in place, these initiatives face some uncertainty. However, given that many of these programmes are already established and have long-term sustainability models, it is likely that their impact will continue, albeit with possible delays in scaling up new projects or extending current projects. The role of the Indian government and other donors in ensuring continuity of such initiatives will be crucial.
Current projects and funding

Source: https://foreignassistance.gov/
The financial landscape: Understanding the broader picture
To provide further clarity on the financial landscape of USAID’s funding for education in India, below is a table summarising the total USAID funding for education between 2007 and 2024, as well as the projected funding for 2024.

Source: https://foreignassistance.gov/