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India

Volume 555: debated on Wednesday 12 December 2012

1. What recent assessment she has made of her Department’s relationship with the Indian Government. (133021)

7. What recent assessment she has made of her Department’s relationship with the Indian Government. (133027)

I held constructive meetings with senior politicians and officials in India last month. We agreed the move to a new relationship based on technical assistance rather than financial aid grants. I announced this in my written ministerial statement of 9 November.

Does my right hon. Friend agree with the Indian Foreign Minister, Salman Khurshid, who has spoken of the need to move from an era of aid to an era of trade?

That is precisely the transition that I believe we are walking towards with India. Our trade with India has grown in recent years, with exports to India growing by more than 20% in 2010. Our development relationship needs to match the changing and successful India we see today, and that is precisely what we are doing.

Does my right hon. Friend agree that as India becomes wealthier, her Department should look to redevelop the relationship with that country and move funds to other parts of the world where they might be of more benefit?

My hon. Friend is absolutely right. As I said, our development relationship with India needs to match the India of today and the future rather than the India of yesterday, which means we can reprioritise our portfolio of development spend on countries where we believe we can still make a difference. Without that assistance from the UK, we would not be able to see change on the ground.

Can the Secretary of State reveal how much financial aid will be provided to India through the UK’s technical assistance?

We currently have an aid programme of around £270 million a year. After we complete our transition to technical assistance, we expect to spend approximately just under £30 million from 2015 onwards, to help the Indian Government to get the most out of the £50 billion a year they spend on things such as health and education.

I appreciate that the Secretary of State has negotiated the changed arrangement with the Indian Government and the state governments, but does she not acknowledge that India still has more poor people than sub-Saharan Africa? Is she prepared to consider not only technical assistance, but perhaps changing the relationship to soft loans, so that India can accelerate poverty reduction using the substantial pro-poor measures it is already adopting?

The right hon. Gentleman is right that our relationship with India will go beyond technical assistance. It will include us helping with investments in small and medium-sized enterprises, particularly in rural and poorer areas of India, so that we not only help them to get the most out of India’s development spend, but drive economic development too.