UK expects to make all money back from India aid investments

UK expects to make all money back from India aid investments
Courtesy: WPA Pool / Pool | Getty Images News Via Getty Images

A ‘UK-India development partnership summary’ released by the UK Foreign, Commonwealth and Development Office (FCDO) recently laid out how a majority of the £38-million allocation of development aid budget for India for 2023-24 will be targeted at climate action projects.

With 75 per cent intended for “Climate and Nature”, 24 per cent for "Bilateral Investment Partnerships (BIP)" and 1 per cent for "Global Health", the FCDO pointed to the high return on investments ever since the aid dynamic changed from a traditional donor-recipient relationship since 2015.

An FCDO spokesperson said: “UK aid helps India reduce its carbon emissions through commercial investments, this is not traditional development aid.

“We have already had £100 million of our £330 million spend to date returned, and expect all our money to be made back in the future.”

The FCDO bilateral development aid budget for India in 2024-25 is expected to rise to £57 million. Most of the UK’s development assistance is invested through British International Investment (BII), with major sectors covered including infrastructure, financial services, and healthcare.

“India is unique in also having a UK equity investment portfolio. To date £330 million of development capital has been committed to invest in smaller, newer Indian enterprises, alongside investment from government of India or other Indian institutions. The aim is to help enterprises to grow and create jobs in ways that are sustainable and inclusive and get to the point where we can sell our stake and reinvest our finance,” notes the development partnership summary.

It adds that BII’s investments in India directly support over 500,000 jobs and the businesses they invested in paid over $500 million in taxes to the government of India in 2021.

Two examples of BII’s investments in India are:

·       Ayana Renewable Power, which was funded in 2018 by BII to invest in clean energy, and

·       Roserve Enviro, which provides end-to-end wastewater treatment and recycling solutions to industrial clients


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This will accelerate the expansion of the market for water service companies and a lead to a corresponding increase in recycling rates, the summary reads.

Besdies, the UK-India Tech Start-up Fund is a £38-million programme running from 2019 to 2032 which aims to improve the success of new start-ups in under-funded job-creating technology-driven enterprises. The funding is directed towards technology for climate action, agriculture, and health.

“We are also collaborating with India to accelerate the SDGs (sustainable development goals) in poorer countries, both through supporting the deployment of Indian development innovations and through our participation in Indian-led international climate initiatives, such as the Coalition for Disaster Resilient Infrastructure and the International Solar Alliance,” the update notes.


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The details are in direct contrast to criticism from some quarters in the UK about large amounts being simply handed out in aid funds to India – one of the world’s fastest growing economies.

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