Britain's government will halt all aid spending in India in 2015 and won't approve any new projects before then.
International Development Secretary Justine Greening said Friday that it is changing its relationship with India to reflect the country's economic growth and rising status.
In 2011, Britain offered India about 280 million pounds ($447 million) in assistance. Many lawmakers have complained that helping a rising economic power is unjustified as Britain's struggles with harsh austerity measures aimed at slashing its debt.
Greening's department said that the change in policy would save Britain about 200 million pounds (US$319 million) by 2015.
It confirmed existing aid programs in India would be completed.
"Now is the time to move to a relationship focusing on skills-sharing rather than aid," Greening said.