UK to end financial aid to India by 2015

Support will be phased out between now and 2015, saving about £200m ($319m), and the UK's focus will then shift to offering technical assistance.

Ms Greening said the move, which will be popular with Tory MPs, reflected India's economic progress and status, BBC reported.

Giving his reaction, India's foreign minister Salman Khurshid said: "Aid is the past and trade is the future."

Until last year, when it was overtaken by Ethiopia, India was the biggest recipient of bilateral aid from the UK, receiving an average of £227m a year in direct financial support over the past three years.

But the UK's support for India, one of the world's fastest-growing economies, has been a cause of concern among Conservative MPs, many of whom believed that the UK should not be giving money to a country which has a multi-million pound space programme.

Ministers have defended the level of financial help in the past on the basis of the extreme poverty that remains in rural areas and historic colonial ties between the two countries.

Ms Greening has been conducting a review of all financial aid budgets since taking over the role in September and visited India earlier in the week to discuss existing arrangements.

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