India: Britain Right To Cut Aid Payments

By Alex Rossi, India Correspondent

India's foreign minister has told Sky News he thinks Britain was right to cut financial aid.

Salman Khurshid was speaking in an exclusive interview following the British government's decision last month to stop direct foreign aid to the country.

"We've moved from the era of aid to the era of trade so we have to really concentrate now on economic relations," he said.

"The traditional concept of aid I think deserves to be eased out," he added.

Between now and 2015 aid will be phased out and Britain will then only provide 'technical assistance' to Asia's third largest economy.

India was the largest recipient of hand-outs from the UK, receiving on average £227m per year over the last three years.

But Mr Khurshid says future ties between the two countries must be based on improving economic relations - 'trade not aid'.

British Foreign Secretary William Hague and Salman Khurshid last month

British politicians are currently trying to court India in the hope of boosting trade at a time of austerity but so far results have been mixed.

Earlier this year India - to the disappointment of Downing Street – decided to buy French fighter jets rather than the Eurofighter Typhoon which is part made by BAE Systems.   

The contract is worth billions of pounds.

When asked about India's decision Mr Khurshid said: "These are things that will come and you have to take them in your stride.

"We do have a relationship with Europe and that is not at the cost of our relationship with the US and certainly not at the cost of our traditional relationship with the UK.

"But there is a relationship with other countries, bilateral as well as through the European Union, and I think you just need to find the right balance."

India has become the focus of anger over Britain's foreign aid bill because it has its own space programme and a booming economy that is growing at 8% a year.

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