Britain makes profit on Indian aid for first time

Telegraph

5 days ago

Britain is finally making a profit out of the aid it sends to India, 78 years after the country gained independence.
The Telegraph understands that figures to be revealed for the first time on Tuesday will show that the UK is making a financial return on development funding sent to the country.
It follows years of criticism that Britain is giving aid money to India at all, given that it can afford its own space programme.
The Foreign, Commonwealth and Development Office (FCDO) annual report will confirm that the UK spends millions on climate-related projects in India, which it is able to make a return on.
But in what is believed to be the first time since the end of the Raj in 1947, these investments have brought a £13m profit in 2024/25.
This is because the spending has created new markets and jobs for the UK, at the same time as helping to tackle climate change.
The year before, Britain sent £37m to New Delhi.
Sir Keir Starmer announced earlier this year that the aid budget will drop to 0.3 per cent of national income from 2027 to fund increased defence spending.
This is less than half the 0.7 per cent target Britain is signed up to.
David Lammy, the Foreign Secretary, wants to see the UK secure more of a return on its investment as part of a new modernised approach.
Both he and Baroness Chapman of Darlington, the development minister, have spoken in recent weeks about how the UK is moving from its role as an aid donor to one as a partner and investor.
The FCDO accounts will show that most of the UK's aid spend on tackling global poverty around the world up until now does not lead to a financial return.
India will be the only country listed in the FCDO's accounts to have a negative aid spend.
It is expected that later this week, Lady Chapman will outline plans to make sure every penny of the aid budget has an impact, such as by saving lives through vaccines or creating economic growth, which benefits both the UK and its aid recipients.
Projected aid spend for countries for 2025/26 is also due to be published in Tuesday's annual accounts, although these figures are provisional and could change over the year.
But the aid spent for India in 2025/26 is also ultimately expected to be negative.
While the FCDO hands out the vast majority of aid money, some other departments, such as business, also hand out aid cash.
In 2012, Pranab Mukherjee, the then-Indian finance minister, sparked anger when he described British aid money as 'peanuts'.
In the same year, the British government pledged to end bilateral aid to India by 2016 as part of a move away from funding middle-income countries. Despite this, millions of pounds have still poured in.
In 2023, India launched a spacecraft to the far side of the moon, making it only the fourth in the world to land an object on the lunar surface.