This study outlines that at the time, Nehru, a strong proponent for socialism led the Indian government. He advocated for the nationalization of infrastructure and business, which undermined privatization. As a result, the Soviet Union was inclined to offer its support, as India served to undermine capitalism (an ideology propagated by the US during the Cold War). Post-Cold War India is predominantly a peaceful state with minimal insurgence from internal or external forces. In addition, the relationship between India and the United States yield desirable results for both countries. The US is one of the major providers of foreign aid to the Indian government. By 2004, research findings estimated that Indias foreign exchange reserves totaled to $100 billion. This paper highlights that the government invests this money in both the private and public sectors, which contributes to the alleviation of poverty in the region via creation of employment opportunities. This helped to improve living standards of Indian citizens whereby, an estimated 80 million people now belong to the middle class. In addition, foreign aid financed the Indian armed forces. For example, the US provided foreign assistance in the Indian-Pakistan war of 1999 emerging victorious. Investigating whether or not the provision of foreign aid results in the successful reduction of poverty and warfare in developing countries continues to yield inconclusive findings.