Britain yet to take a call on aid cut to India

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Britain is yet to take a call on cutting its 280 million pound a year development aid to India, the country's Foreign secretary William Hague said here Thursday.

Hague, who is on a visit to India, told journalists at a press conference that his country's minister heading the department for international development (DfID), Justine Greening, would be examining the areas where Britain is providing funding to India and take a decision.

Hague said the two countries are holding talks on the issue.

"We have been discussing the issue... The governments of UK and India have agreed on the way forward on this issue," Hague said, adding that Greening would be issuing a statement and he did "not want to pre-empt the issue".

Indian External Affairs Minister Salman Khurshid said the two countries had discussed all aspects of bilateral trade, which "has immense potential".

"Aid is past, trade is future," Khurshid said.

India is the third largest investor in Britain, while the UK also has major investments in India.

The Sunday Times had reported that Britain plans to cut its 280 million a year aid to India following growing domestic pressure on Prime Minister David Cameron to stop funding emerging economic powers such as India, China and Brazil at a time when Britain was facing an economic downturn.

The Sunday Times had said that Greening during her upcoming visit to New Delhi was expected to discuss a time-table for "winding down" British aid commitment to India.

"She is expected to make it clear that the Britain's commitment to India will change radically at the end of the current eight-year £1.6 bn programme, which lasts until 2015," the paper said, adding that Greening would open negotiations to replace aid with trade.

President Pranab Mukherjee as finance minister had dismissed British aid as "peanuts".