Britain ending financial aid to emerging power India

Fri Nov 9, 2012 11:30pm IST

British Prime Minister David Cameron (L) and his Indian counterpart Manmohan Singh walk before their meeting in New Delhi July 29, 2010. REUTERS/B Mathur/Files

British Prime Minister David Cameron (L) and his Indian counterpart Manmohan Singh walk before their meeting in New Delhi July 29, 2010.

Credit: Reuters/B Mathur/Files

Related Topics

REUTERS - Britain will stop giving financial aid to India by 2015, the government said on Friday, marking a shift in ties between the one-time imperial power and its fast-growing former colony.

The move follows anger at handouts to an economy which is Asia's third largest and has a space program, at a time of spending cuts and economic gloom in the United Kingdom.

"It's time to recognise India's changing place in the world," International Development Secretary Justine Greening said in a statement that estimated savings of GBP 200 million by 2015.

Existing programs will be completed by that date and Britain will make no new cash commitments.

India became independent from British rule in 1947. It is now the third largest investor in Britain and its companies own flagship brands including Jaguar Land Rover.

Despite India's rapid economic development over the past decade it suffers deep pockets of severe malnutrition and extreme poverty.

The move is unlikely to anger the Indian government, whose former finance minister described Britain's aid contribution to India as a 'peanut.' In 2011, Prime Minister Manmohan Singh announced a $5 billion aid credit line for Africa.

Controversy over the aid program flared after former International Development Secretary Andrew Mitchell said last year the GBP 280 million annual assistance was partly about "seeking to sell the Typhoon."

India later entered into exclusive negotiations with France's Rafale fighter, rejecting the British-backed plane for an estimated $15 billion contract.

(Reporting By Frank Jack Daniel; Editing by Toby Chopra)

FILED UNDER:

Reuters Showcase

GDP Growth

GDP Growth

India revises up 2013/14 GDP growth to 6.9 percent.  Full Article 

Adani Restructuring

Adani Restructuring

Adani hives off power, ports businesses to boost growth.  Full Article 

Bank of Baroda

Bank of Baroda

Q3 net profit down 69 pct on higher provisions  Full Article 

Trading Fees

Trading Fees

BSE slashes fees in FX derivatives battle with NSE  Full Article 

SpiceJet Turnaround

SpiceJet Turnaround

SpiceJet board approves up to $243 mln share sale plan  Full Article 

Currency Market

Currency Market

RBI urges companies to hedge FX exposure  Full Article 

Banking Sector

Banking Sector

Banks say no room to cut lending rates, thwarting RBI easing  Full Article 

ICICI Results

ICICI Results

ICICI sets quarterly record profit as Q3 net rises 14 pct  Full Article 

Reuters Poll

Reuters Poll

RBI seen holding rates steady on Tuesday, minority of analysts expect cut  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage