UK minister promises to stop all India aid by 2015 - Gulf Daily News

LONDON: Britain's government said yesterday it will stop all aid to India in 2015 and slash its remaining handouts, bowing to domestic pressure over its foreign development budget at a time of austerity.

International Develop-ment Secretary Justine Greening said the move, which will save Britain around £200 million ($320m, BD121m) from 2013 to 2015, recognises India's "changing place in the world".

Prime Minister David Cameron has faced growing opposition at home to the aid commitment to India, with commentators often pointing out that Britain's booming former colony is able to fund its own space programme.

International Development Minister Justine Greening said that after visiting India this week with Foreign Secretary William Hague, the relationship with India would now focus on "trade not aid".

"India is successfully developing and our own bilateral relationship has to keep up with 21st century India," Greening said.

"It's time to recognise India's changing place in the world."

As she made the announcement, British drinks group Diageo announced a $2 billion deal to buy up to 53.4pc of India's leading spirits maker, giving it a commanding presence in the world's biggest whisky market.

Conservative Cameron's coalition government is trying to save money as part of its efforts to reduce a record deficit.

British aid to India was reduced last year as part of the widespread austerity measures, but still committed London to spending £280m a year until 2015.

Total spending between 2013 and 2015 will now be £200m less than had been planned previously, although Britain would complete all of its aid programmes in India, Greening said.

The Department of International Development confirmed in a statement: "Justine Greening will not sign off any new programmes, and financial aid programmes to the country will end completely in 2015."

Cameron has rejected growing pressure from MPs in his centre-right party to scrap his pledge to spend 0.7pc of national income on overseas aid.

But while he has previously defended aid to India on the basis that tens of millions of Indians live in poverty, an end to the payments has been on the cards for sometime.

Britain was stung in February when New Delhi announced a big contract to buy French warplanes instead of the UK-backed Eurofighter Typhoon.

That came despite intense efforts to expand trade with India, with Cameron leading a huge business delegation to India in one of his first trips after taking office in 2010.