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Britain cuts aid to India

Posted on Nov 09, 11:11PM | IANS

Britain Friday announced it was cutting its development aid to India "with immediate effect".

Britain's Development Secretary Justine Greening made the announcement in a statement Friday, a day after British Foreign Secretary William Hague said in New Delhi that the matter was still being discussed.

Britain provides 280 million pounds a year aid to India.

Greening, who is on a visit to India to discuss the aid programme, said that ongoing programmes would be completed by 2015 "as planned".

However, no new programmes will be signed and financial aid programmes to India will "end completely in 2015," she said.

Instead, Britain is to move to "skills sharing" with India.

All new programmes will now take "the form of technical assistance, sharing UK expertise in trade, investment, skills and health."

"Additionally, investments in private sector projects expect to generate a return. That work will see a 'hub' of specialists in India working alongside the Foreign Office, UK Trade and Investment and other government departments to share advice and skills with the Government of India. The shift reflects India's successful transition to become a key part of the global economy," the statement said.

Greening said that after reviewing the aid programme and holding talks with Indian officials, "we agreed that now is the time to move to a relationship focussing on skills-sharing rather than aid".

She stressed that she had seen first hand the "tremendous progress being made" in India.

"India is successfully developing and our own bilateral relationship has to keep up with 21st century India. It's time to recognise India's changing place in the world."

External Affairs Minister Salman Khurshid had Thursday said at the joint press conference with Hague that "aid is past, trade is the future".

A Department for International Assistance (DfID) statement said that Britain's Technical Assistance presence in India post-2015 is expected to cost around one tenth of the current programme (of 280 million pounds a year).

Britain had been under pressure to cut aid to India with its own economy on a downswing.

"Post 2015, the relationship will consist of technical assistance and returnable capital investments," the statement said.

In 2010, bilateral trade between Britain and India grew by 20 percent bringing the total to 13 billion pounds.