How much aid does the UK spend in India, and why?

In 2012, the UK Government announced plans to no longer provide aid to the Indian Government, but rather to focus UK aid work on investment, partnerships and the private sector. All aid to the Indian government ended in 2015.

UK aid to India continues, in the form of investments from the UK’s development finance institution, British International Investment, as well as in other aid projects.

This page provides an overview of UK development work, government objectives, and aid spending in India.

What plans were announced in 2011—2012?

In 2011, following discussions with the Indian Government, the then Secretary of State for International Development, Andrew Mitchell, said that the UK would move from an “aid-based development relationship” with India into a “meaningful and mutual partnership” with the country.

Citing India’s growing economic power and growing global influence, Mr Mitchell said that the change would take place “in a few years”. He said that UK aid would continue under the model for a period, given the continuing high levels of poverty in parts of India, on which UK aid would be prioritised.

In 2012, the then International Development Secretary, Justine Greening, with the agreement of the Indian Government, announced that the UK would no longer provide aid to Indian government from 2015.

The Secretary of State said that the relationship would “increasingly be about trade not aid” and future UK aid would focus on technical support, sharing expertise, and investing in private sector projects.

The government’s change in policy followed a review of UK aid to all countries in 2011 and a report by the Commons International Development Committee. The Committee had backed continuing aid until 2015 to help address poverty in India but said UK aid would only have a “marginal impact” due to the size of India’s population and economy. After 2015, the committee recommended, “the development relationship must change fundamentally to one based on mutual learning and technical assistance where requested”.

How much aid does the UK spend in India? Bilateral aid, 2009 to 2024

Statistics published by the Foreign, Commonwealth and Development Office (FCDO) show that the UK has provided about £2.7 billion in bilateral aid to India between 2009 and 2024. The amount has decreased sharply in recent years, as shown in the chart below.

Since 2016 the overall total has fallen to below £100 million per year, and this has fallen even further in the last few years.

Bilateral aid is that provided for a specific programme or purpose, in contrast to multilateral aid, which represents contributions from governments to multilateral agencies to fund their development programmes.

Source: FCDO, Statistics on International Development: final UK ODA spend 2024, 18 September 2025, and earlier editions

Health was the main focus of UK aid in India from 2009 to roughly 2013, alongside economic infrastructure and services. Spending on climate change is a cross-cutting issue and not separately reported, though in 2023/24 the government planned for 75% of FCDO spending on aid to India to be on climate and nature.

Profits can also be generated

Aid can take the form of loans and investments, and payments coming back to the UK in interest or investment returns count as negative amounts of aid.

These amounts have been increasingly significant in recent years, particularly in production sectors (including sectors like business investment). In 2024, although the UK provided £24.1 million in aid to several sectors (the largest was multisector/cross-cutting projects), it also received £24.5 million back in investment returns. As a result, in 2024 the UK received more aid from India than it gave, by about £0.4 million.

Planned FCDO aid spending in 2025/26

In 2025/26, the FCDO has allocated £24.5 million in bilateral aid for India (this does not include aid through multilateral bodies). The government has not published a further breakdown of these plans.

Estimates of the value of wider UK aid activity

In a 2023 report, the UK’s Independent Commission for Aid Impact (ICAI), which is responsible for monitoring UK aid spending, assessed wider UK aid activity in India and estimated the total value of UK aid.

The ICAI assessed UK contributions to multilateral agencies active in India, investments from the UK’s development finance institution, British International Investment (BII), and bilateral development investments by the FCDO and its predecessors. The ICAI estimated that total UK aid and investments across these three themes was around £2.3 billion from 2016 to 2021. The majority was from the BII:

• Around £1 billion in investments were made by BII. The BII uses UK aid funding (through capital injections) and the BII’s existing assets to invest in businesses and programmes in low- and lower- middle income countries. Its investments are intended to generate a return. Around a third of the BII’s portfolio remains in India, where it estimates it supports around 480,000 jobs.
• Around £749 million through multilateral institutions, such as the World Bank. These funds focus on economic development, renewable energy, climate and green growth, improving governance, and human capital development (such as education, social security systems, and health)
• £441 million in bilateral UK aid (see the above chart)
• £129 million in bilateral development investments by the FCDO and its predecessors. These also generate a return to the UK.

Why does the UK spend aid in India?

UK aid to India is spent within the context of wider UK-Indian relations and the 2021 roadmap for future relations agreed between these two countries. These include five broad areas of collaboration, including:

1. Strengthening Indian-UK connections, such as cooperation between universities
2. Trade and prosperity, including increasing trade and promoting sustainable urbanisation
3. Defence and security, including defence and maritime cooperation
4. Climate, such as reducing carbon emissions and building resilience to climate change
5. Health, including pandemic preparedness and the response to Covid-19

In 2020, the UK Government argued that these broad priorities were in the interest of the UK and UK businesses, and targeted at supporting the then-230 million Indians living in poverty, addressing constraints to growth, and generating a return for the UK by creating new markets for trade and investment. It also argued that such investments are key to strengthening the UK’s partnership with India.

In April 2023, the UK Government defended continuing UK aid to India as helping address poverty, promoting economic growth and supporting India adapt to climate change. It also emphasised that much UK spending is “investment”:

The government decided in 2015 to end direct bilateral financial assistance to the Indian government. This continues to be the position. The decision recognised that India has made substantial development gains and was increasingly able to invest in its own development. Since then, we have concentrated on investments to help secure sustainable private sector growth and to tackle climate change, reflecting the importance of continued economic growth to meet the Sustainable Development Goals in India (average income per head is less than $2,500), and that India is one of a handful of countries whose development choices will determine global climate outcomes.

The bulk of our bilateral offer is investment with the dual objective of development impact and preserving our capital.

The Labour Government has said aid to India supports a strategic partnership, helps to address climate change, and creates investment and job opportunities for the UK.

What progress has India made on poverty reduction and climate change?

The government and BII have cited poverty and India’s global importance to addressing climate change as priorities for aid and investment.

In 2025, the Indian Government reported that the proportion of the population living in multidimensional poverty fell from 55% in 2005-6 to 15% in 2019-21, though in some Indian states this remained as high as 20% to 33%. Multidimensional poverty accounts for deprivation beyond financial poverty. The report estimated that South Asia, including India, is “on track to be virtually free of extreme poverty” by 2030 (this being defined as living on less than $3 per day).

India, with a population of 1.2 billion, is also one of the one of the world’s largest current sources of CO2 emissions. In 2022, India represented 7% of global emissions. It also expects electricity demand to be four or five times higher by 2047. While India has been investing in solar and wind energy sources, coal constitutes 46% of its energy supply and it is the second largest user of coal for electricity generation globally, behind China.

How effective is UK aid in India?

A 2023 ICAI report on UK aid to India has been critical of spending, rating it overall as “amber/red” (the second-lowest score).

The ICAI raised specific concerns including a lack of focus on poverty reduction, a risk of “duplicating” funds already available from the private market, especially in the case of the BII’s investment in financial services, and an absence of tailoring of UK research funds for India’s needs. While acknowledging “acute political sensitivities”, it noted there were “missed opportunities” in using UK aid to support human rights and civil society.

The ICAI said that UK work on climate change, energy and related technologies were “distinct” and a “convincing” part of the UK’s portfolio.

In a follow-up review published in 2024, the Commission said that while the UK and BII had taken steps to better focus on inclusive growth and poverty reduction in India, the BII needed to do more to address “significant reputational links” and reduce poverty. The ICAI cited concerns for the BII’s investments in a cosmetic programme and a social media platform. The BII has defended its investments (PDF) as supporting emerging businesses and female entrepreneurs and having taken account of risk assessments.

In its response, in 2023 the government defended its approach to poverty reduction, saying a focus on “clean growth” was a means to achieve this. It said that the promotion of human rights occurred beyond the aid budget, including in diplomatic engagement and institutional partnerships.

Further reading and resources

• Indian Government, Voluntary review: Sustainable development goals, 2025. National progress on the 17 development goals, including zero poverty and hunger. The goals are intended to be met by 2030.
• FCDO, Development Tracker, Country: India. List of active aid programmes. Note that this is a live system for which plans and budgets may change and are not finalised. Data may not be complete. Final aid statistics for the previous calendar year are published in September each year by the FCDO: Statistics on international development.
• ICAI, UK aid to India, 2022 to 2024. Links to reports, follow ups and government response.
• BII, Investing for impact in India (2023). Summary of its work.
• Full Fact, UK aid didn’t pay for India’s moon mission, September 2023
• The Observer Research Foundation America, India’s foreign assistance: trends, processes, and priorities, 2024. Details assistance from India.
• Research and Information System for Developing Countries India’s foreign assistance: Trends, processes, and priorities, 2022. A further overview of India’s external assistance.