An aid worker distributes grain to a woman in rural Rajarchar Village, Bangladesh. The food was provided by the nonprofit Save the Children and its partner CODEC and funded by USAID. Image from Flickr. CC BY-NC 2.0

The United States Agency for International Development (USAID), founded after the 1961 Foreign Assistance Act, has been leading US aid efforts in several South Asian countries for decades.

However, an executive order from US President Donald Trump dated January 20, 2025, put all USAID and State Department projects, worth USD 44 billion, on hold for 90 days. According to the order, the administration will review each program and decide whether to cancel it, keep it running, or change it to better align with Trump's priorities. In 2023, the US disbursed USD 72 billion — 1.2 percent of its total budget — to over 200 countries for 20,000 activities, including fighting global hunger, disease, and human rights abuses.

The sudden announcement hit countries like Bangladesh and Nepal hard. These countries have long relied on USAID for essential programs in food security, healthcare, education, and agricultural development. In 2023, Bangladesh received USD 490 million in aid from USAID, while Nepal secured a USD 659 million five-year development deal in 2022.

The aid pause had immediate impacts, including the layoff of over  1,000 workers at Bangladesh’s  International Centre for Diarrhoeal Disease Research, Bangladesh (icddr,b), a vital research and treatment center dedicated to saving the lives of the disadvantaged. In Pakistan, suspending US-funded health programs endangers 1.7 million people, including 1.2 million Afghan refugees who have been stuck in limbo in Pakistan since the US pulled out of Afghanistan in August 2021.

Lasting impact on Bangladesh

USAID's impact can be seen across nearly every sector in Bangladesh. Expat Bangladeshi Physician Rumi Ahmed shared in a Facebook post:

There is hardly a sector in Bangladesh where USAID has not left its mark. Back in the 1960s, rice production was far lower, but thanks to agricultural advancements — modern seeds, improved techniques, and strategic support — our yields have multiplied, even as arable land has decreased.

Growing up in our villages, we had no electricity. Well into the late 1970s and 1990s, we relied on hurricane lamps. Today, nearly every home in Bangladesh has electricity, thanks in large part to the Rural Electrification Board, which was funded and supported by USAID.

As a cyclone-prone country, we used to see devastating loss of life from storms. In the past, millions perished in cyclones, but today, even with severe weather, casualties are minimal. That’s because of the extensive network of multipurpose cyclone shelters along our coast and the highly effective early warning system — both made possible through USAID’s efforts.

In healthcare, USAID has revolutionized the fight against tuberculosis (TB) by funding and supporting the widespread use of the GeneXpert system, dramatically improving diagnosis and treatment.

And when COVID-19 hit, the Pfizer and Moderna vaccines you stood in line for? They were a direct gift from USAID.

Since 1990, USAID has helped Bangladesh cut maternal and child mortality by over 60 percent, expand family planning services, and improve nutrition. USAID has helped improve the quality of education, particularly for children from poor and disadvantaged families, and helped the development successful television program Sisimpur, which has improved literacy, numeracy, and hygiene practices among young children.

Beyond Access and Save the Children in Bangladesh partnered to create the USAID-funded READ program and expand community literacy in Bangladesh. Photo from Flickr CC BY-NC 2.0

There have been reports that over a dozen healthcare facilities serving Rohingya refugees have suspended operations recently, cutting off thousands from essential health services in the crowded camps near Myanmar's border in Cox's Bazar district.

As per a report in the Bangla daily “Kaler Kantha”, the aid pause has left over 10,000 workers jobless from 300+ non-profits who sourced grants from USAID.

Health facilities for Afghan refugees in Pakistan to be shut down

Pakistan is also facing harsh impacts from the pause. Over 60 UNFPA-run health facilities are set to close, depriving 1.7 million people, including 1.2 million Afghan refugees, of vital reproductive health services. The freeze also affects development projects, raising questions about regional self-reliance or seeking new allies. Across various sectors, 39 projects worth USD 845 million — including energy, economic development, agriculture, governance, education, health, and humanitarian aid — have been suspended.

The fallout of these suspensions could be a reduction of US influence in Pakistan and a deterioration of the US's reputation in Pakistan.

A man in North Waziristan, Pakistan, receives emergency food assistance through the UN World Food Program, the Government of Pakistan, and USAID’s Office of Food for Peace. Photo from Flickr CC BY-NC 2.0

Suspension of projects in Nepal threatens neonatal health

USAID's projects in Nepal aimed to promote equal access and opportunities, Particularly in the Terai belt, which faces gender inequality issues, limited family health options, and a lack of Indigenous rights. The key sectors where USAID supports Nepal with aid include health, education, agriculture, infrastructure, economic growth, enhancing community participation in Natural Resource Management, humanitarian aid, and women and children empowerment. The aid pause will impact around 300 NGOs, consultancies, and nonprofits for at least three months.

The projects and programs in Nepal that are not aligned with the priorities of the new US administration, like nutrition, climate change, and LGBTQ+ issues, have been affected. Apart from four big project tranches, the USAID Biodiversity (Jal Jangal) project suspension is expected to have a substantial impact on Nepal's development aid, affecting livelihoods and incomes generated by these projects.

This recent curtail from USAID funding has impacted the educational sector of Taplejung district in the easternmost Koshi province of Nepal. 39 schools in Taplejung, where the early grade learning program had started, have been directly affected by it. Trump’s aid cut jeopardises neonatal health care as over 2,000 neonates die in Nepal each year. The USAID funding freeze has also led to the termination of 36 staff nurses in federal and provincial hospitals.

A Nepali nurse working at a teaching hospital in Kathmandu partly funded by USAID. Photo from Flickr. CC BY-NC 2.0

Can India step up?

Although India received less US aid relative to its size — around USD 150 million from USAID in 2024 — the US aid pause has caused a setback in grassroots health and education programmes. Analysts say that India, as the largest country in the region with economic stability, can step up to fill some void left by the United States and help countries like Nepal, Bhutan and Bangladesh.