Government to cut foreign aid to India as part of 'new approach' to funding poorer countries

The Government is to cut its longstanding commitment to provide foreign aid to India because the country's growing economy means it no longer needs British support, it emerged today.

Justine Greening, the new International Development Secretary, is expected to announce that the UK's commitment to India will radically change at the end of the current eight-year funding programme.

A review of aid last year led to a reduction in the sums going to the India, but it committed the UK to spending an average of £280 million a year in the country's poorest states until 2015.

Ms Greening plans to travel to India in the next few months for talks with the government about a timetable for winding down aid payments which have long been criticised by Tory MPs.

She opened discussions with members of the Indian government during a World Bank meeting in Tokyo last month. Last week she told MPs that she wanted to continue those talks “as a matter of urgency”.

However it is understood the government will continue to provide India with expertise and technical assistance, including advising state governments in the country on their own development projects and providing training materials for Indian aid workers.

“We have made it clear over the last couple of years that we do not expect to be in India indefinitely,” said a government source.

Critics point out that India does not need the cash as it has its own space programme and spends a reported £70 billion a year tackling poverty.

However despite calls from some senior Tories to reduce Britain's aid budget in lines with cuts to other Government Departments this is thought to be unlikely.

Britain is committed to increasing aid expenditure to the United Nations target of 0.7 per cent of GDP by 2013 and the aid money currently going to India is expected to be diverted to other poorer countries.

While other Whitehall ministries face cuts, the budget of the international development department will rise by 35 per cent in real terms by 2015.

Greening has pledged a “new approach” to aid with a greater focus on helping the world's poorest. She is also reviewing funding to Rwanda amid concerns about the human rights record of Paul Kagame, the president.

Indian finance minister Pranab Mukherjee last year said the country no longer wanted or needed the British aid, describing the money as “a peanut in our total development expenditure”.