Global Development Compact (GDC)

Context

The Global Development Compact (GDC) was proposed by Prime Minister Narendra Modi during the 3rd Voice of Global South Summit (2024). It is an Indian-led initiative aimed at reimagining global development partnerships by ensuring equity, inclusivity, sustainability, and sovereignty in development cooperation among countries of the Global South.

Objective

To create a harmonious and balanced framework of development cooperation that is not dependent on a single modality (such as loans) but incorporates a mix of five key pillars:

1. Capacity building

2. Technology transfer

3. Market access

4. Grants

5. Concessional finance

Rationale Behind GDC

• The limitations of traditional Official Development Assistance (ODA) in the wake of shrinking aid budgets in the Global North.

• Rising sovereign debt burdens among developing countries.

• India’s experience with development partnerships under initiatives like IDEAS, LoCs, and South-South Cooperation.

• Ensuring that development assistance is not tied to political or economic conditions, unlike many Western aid models.

• Need to rebalance development finance amidst rising geopolitical and economic uncertainties.

Core Features

• Multi-modal development cooperation integrating not just finance, but also knowledge and market linkages.

• Promotes local ownership, demand-driven development, and mutual respect.

• Emphasizes the use of innovative finance, such as triangular cooperation and blended finance, instead of debt-heavy models.

• Encourages collaborative partnerships between traditional donors and emerging economies (e.g., India, Brazil, Indonesia).

• Supports sustainable development, aligned with the SDGs, particularly in Africa, Latin America, and Asia.

India’s Role in GDC

• India positions itself as a development partner rather than a donor.

• Uses tools such as:

  • Lines of Credit (LoCs)

  • Development grants

  • Technical training (ITEC)

  • Global Innovation Partnership (GIP)

  • Triangular Cooperation (e.g., India-Germany-African nations)

• Highlights Make in India for the World and Digital Public Infrastructure (DPI) sharing for global benefit.

Significance

• Represents a paradigm shift in development cooperation from charity to partnerships based on mutual growth.

• Challenges the conditionality-based Western ODA structure dominated by OECD-DAC.

• Promotes self-reliant and resilient economies in the Global South.

• Enhances India’s strategic footprint and soft power in international relations.

• Offers an alternative to China's debt-driven BRI model by promoting inclusive development and sovereign decision-making.

The Global Development Compact is a visionary framework that positions India as a leader in reshaping global development narratives, rooted in equity, sustainability, and true partnership. It is a credible alternative to Western and Chinese development models, aligning with India's growing global stature and its commitment to a multipolar, reformed global order.