Britain's aid programme to India lacks coherence and does very little to address negative trends in Indian democracy and human rights despite areas of strength in the relationship, a UK-based aid watchdog has said.
The review by the Independent Commission for Aid Impact (ICAI) found that much of the British Investment International (BII) portfolio lacks strong "financial additionality" — given India's relatively mature financial markets — and does not have a clear link to inclusive growth and poverty reduction.
In addition, it found that there is little UK support for Indian democracy and human rights, despite negative trends in these areas.
According to the ICAI, the UK provided approximately 2.3 billion pounds in aid between 2016 and 2021. This included 441 million pounds in bilateral aid, 1 billion pounds in investments through the UK's development finance institution British Investment International (BII).
It further gave 129 million pounds in investments via the Foreign, Commonwealth and Development Office (FCDO), and 749 pounds million through multilateral channels.
In total, loans to India represent 28 per cent of the BII global loan portfolio.
India was the 11th largest recipient of UK aid in 2021, receiving more aid than countries like Bangladesh and Kenya, which is why "it is all the more important that every penny is well spent or invested", ICAI chief commissioner Tamsyn Barton, who led the review, said.
"However, we found that the portfolio wasn't coherent and that the development rationale for it wasn't clear. And while we appreciate that democracy and human rights in India is a sensitive area for the UK, we were surprised to find out that the UK had largely ceased supporting work at the local level," Barton said in a statement.
The review lauded the efforts made to strengthen internal coordination, and recognised the good partnerships with the Indian government and the World Bank.
"Despite concerns about the model that has emerged in India, there are areas of strength to build on if the UK and India want to continue this partnership. The UK has provided innovative support on climate change and clean energy, showing the value of combining support for policy reforms with well-targeted development investments," Barton said.
According to the Guardian, India was the largest recipient of UK bilateral grant aid, with annual funding peaking at 421 million pounds in 2010, but that figure fell to 95 million pounds in 2020.
"Since 2015 the UK has given no financial aid to the government of India. Most of our funding now is focused on business investments which help create new markets and jobs for the UK, as well as India," a Foreign Office spokesperson was reported as saying in the Guardian.20230314-104206