UK to end development aid to India in 2015

9 Nov 12
The UK will wind down its development aid spending in India between now and 2015 in a move that is expected to save £200m, it was announced today.

By Nick Mann | 9 November 2012

The UK will wind down its development aid spending in India between now and 2015 in a move that is expected to save £200m, it was announced today.

Existing projects will continue until the end of 2015 as planned but no new programmes will be signed off and financial aid programmes to the country will end completely in 2015.

International Development Secretary Justine Greening said the decision to end the programme reflected a ‘new type’ of relationship with India. All new development co-operation programmes would focus on either technical assistance to share skills and expertise, or returnable capital investments in private sector projects focused on ing the poor.

‘These changes reflect India's rapid growth and development progress in the last decade. India's growing ability to finance its own development programmes means that the time has now come to end the UK's financial grant support,’ she explained.

‘The growing two-way trade and investment between our two countries means that our development partnership should increasingly be about trade not aid.’

She added: ‘It is of course critical that we fulfil all the commitments we have already made and that we continue with those short-term projects already under way which are an important part of the UK and Government of India’s development programme.’

Last year’s UK Bilateral Aid Review included a commitment to spend £280m a year in India between 2011 and 2015, but the restructuring announced today is expected to save around £200m between 2013 and 2015. It comes after the UK International Development Committee called in June 2011 for a ‘fundamental’ change in the UK’s post-2015 aid relationship with India.

The UK’s technical assistance presence in India after 2015 is expected to cost around one tenth of the current development aid programme. A ‘hub’ of UK specialists will work in India, drawing on experience from across government to share advice and skills with India’s government.

Together, the UK and Indian governments have also agreed to work more closely in global development issues to other poor countries learn from India’s experience in areas such as trade and food security.

At last month's Conservative Party conference, Greening announced plans to tighten controls on how the UK spends its ring-fenced aid budget. Since taking over from Andrew Mitchell as international development secretary in September she has also launched a review of the department’s spending on external consultants.

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