The British government announced on Friday that it is stopping aid to India considering its former colony's "rapid growth and development progress over the past decade."
No new British financial aid grants will be made to India, and current projects worth about $319 million will be phased out between now and 2015.
Britain's Department for international development said in a press release that Secretary Justine Greening announced that "UK's program in India will be restructured and traditional financial grant aid ended responsibly, so programs already underway will be completed by the end of 2015 as planned." She "will not sign off any new programs, and financial aid programs to the country will end completely in 2015."
From now, all new programs will focus on sharing skills and expertise in priority areas such a growth, trade and investment, skills and health; and on investments in private sector projects designed to help the poor while generating a return. That work will see a 'hub' of specialists in India working alongside the Foreign Office, UKTrade and Investment and other government departments to share advice and skills with the Government of India.
The decision follows Greening's visit to India this week, during which she held talks with India's senior leaders and Government officials about the future of UK-India development cooperation.
The shift reflects India's successful transition to become a key part of the global economy.
Greening said that "After reviewing the program and holding discussions with the Government of India this week, we agreed that now is the time to move to a relationship focusing on skills-sharing rather than aid."
She said she realized during her visit "the tremendous progress being made by India," and that
"It is of course critical that we fulfill all the commitments we have already made and that we continue with those short-term projects already underway which are an important part of the UK and Government of India's development program."
Britain has made it clear that no existing projects will be canceled.
After 2015, UK-India relationship will consist of Technical Assistance and returnable capital investments.
In 2010, bilateral trade between the two countries grew by 20%. UK goods export to India grew by 37% and goods imports from India rose by 27%.
Britain's Department for international development estimates that India's development efforts have pulled 60 million people out of extreme poverty in the last 5 years.
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