Britain ending financial aid to emerging power India

Sat Nov 10, 2012 1:30pm IST

1 of 2. Britain's Prime Minister David Cameron (L) shakes hands with India's Prime Minister Manmohan Singh ahead of a bilateral meeting before the start of the G20 Summit of major world economies in Cannes November 3, 2011.

Credit: Reuters/Toby Melville

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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

WTO

REUTERS SHOWCASE

Factory Activity

Factory Activity

Factories post fastest growth for 17 months in July  Full Article 

Reviving Infosys

Reviving Infosys

CEO Sikka says to improve business with new growth avenues  Full Article 

Outlook Slashed

Outlook Slashed

ArcelorMittal cuts outlook as ore prices hit mining  Full Article 

Car Launch Ahead

Car Launch Ahead

Tata Motors bets on new sedan to revive weak India sales.  Full Article 

Gold Smuggling

Gold Smuggling

In cat-and-mouse game, India uncovers new gold smuggling route.  Full Article 

Re-gaining Momentum

Re-gaining Momentum

China's factories spring to life as global trade reawakens  Full Article 

Coal India

Coal India

Some Coal India mines may be run by foreign firms - minister  Full Article 

Reuters India Mobile

Reuters India Mobile

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