In the most recent years, the developing countries realize the fact that they need to do trade instead of taking aid. In this regard, there are many controversies that whether trade or aid is beneficial for them. The point to be noted is that either the aid is taken in its literal meanings or not. In its literal meanings, it is the free transfer of resources and there is not found any condition on the provision of resources so a foreign exchange from trade cant be as valuable as of aid. But the picture is not so simple.
There is always a difference between grant and aid that is given to the developing countries on the part of developed nations. In the most cases aid given is tied i.e., there is some additional cost in the sense that the same goods or services might be cheaper in the free market as compared to the prices that are being charged from the recipients of aid. This increases the debt burden on the aid taking nations because they have to pay more.
