Britain ending financial aid to emerging power India

Fri Nov 9, 2012 1:59pm EST

British Prime Minister David Cameron (L) and his Indian counterpart Manmohan Singh attend a joint news conference in New Delhi in this file photo taken July 29, 2010. REUTERS/B Mathur

British Prime Minister David Cameron (L) and his Indian counterpart Manmohan Singh attend a joint news conference in New Delhi in this file photo taken July 29, 2010.

Credit: Reuters/B Mathur

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 recognize 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:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
Arnleif wrote:
It would be equally naturally to speak of German charity to England after WW2, as we always frame the words “aid” and “charity” to India and other former exploited and devastated colonies as a final insult?

Nov 10, 2012 9:13am EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Full focus