Coffee House

Storm in an Indian teacup

5 February 2012

2:19 PM

5 February 2012

2:19 PM

So, does India want the UK’s aid or not? If you believe the Indian finance
minister, Pranab Mukherjee, the funds are unnecessary, ‘peanuts’ even. The Daily Telegraph reports that British ministers ‘begged’ the Indian
government to take the money. The story is likely to garner attention, especially as aid to a growing power like India is a contentious proposition.

But before taking the Indian Finance Minister’s word — and the Telegraph’s reporting — as truth, it is worth looking at a few facts. First, Mukherjee made the statement in 2010, as
reported in the Financial Times at the time. Since then the Finance Minister has publicly described
himself ‘very pleased’ with UK aid, including as late as December 2011 when he met with Andrew Mitchell. More importantly, as I reported on Coffee House in late June last year, the Indian Prime Minister told David Cameron to ‘think hard’
about cutting UK aid to India, which the Indian government ‘welcomed’.


The reason is simple: India still struggles to develop at the pace it needs to and welcomes UK expertise (not just funds) to help address the country’s poverty. If the UK is to run an aid
programme, not working in a place that has the world’s largest number of poor people seems a bit odd.

So if this is 2010 news, why is the story making the headlines now? Because of the Indian decision to declare the French-built Rafale, and not the UK-manufactured Typhoon, their preference for
future purchases. The thinking seems to be, ‘If they won’t buy our planes then why should we give them aid?’

But here, too, there is more than appears at first glance. The Rafale bid is just the ‘lowest bid’, not necessarily the best one. As a Cabinet minister told me, ‘there have been
many occasions at the Grand National when the horse leading the early part of the race finishes second’. So BAE are still in with a chance and will need to push through in the next stages of
bidding, including by showing greater life-time cost savings for the Typhoon over the Rafale.

There may be good arguments for reducing UK aid to India — many of which were aired in a recent debate in the House of Commons — but outdated comments from an Indian minister and a
premature assessment of the viability of the Typhoon bid aren’t among them.

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Show comments
  • Hindusthani

    So much worry for poor in India (not here but on uk news paper sites 2000 comments on telegraph alone). Most laughable… The situation is because of the arrogant British (Brutish) plundered India, richest country at that time, for 2 centuries & now they have the guts to turn around & preach us about charity. They want their bribe (aid) back because they did not get $15Bn fighter jet contract. They would do well if they use the money for London Olympics & keep DOW Chemicals (Union Carbide) out who was responsible for Bhopal gas tragedy which killed 25000 people & effected over 1L more, for life, of hell.

  • Richard of Moscow

    “As a Cabinet minister told me, ‘there have been many occasions at the Grand National when the horse leading the early part of the race finishes second’.”

    Yep, even cabinet ministers consider you an imbecile.

  • Jeremy


    ‘…as for the indians living in your country legally and illegally, take that as the punishment…’

    So even those proselytizing on their behalf do not see their presence here as a blessing…

  • Remittance Man

    The point everyone seems to be forgetting here is that this has got stuff all to do with India’s decision about what fighter it will buy. Nor does it have aything to do with the rightness of the Indian Finance Minister’s statement. It has everything to do with the attitude of the DfID.

    Rightly or wrongly Mr Mukerjee said his country doesnt want the aid. But instead of accepting this and finding somewhere else to spend the cash, Britain’s aid administrators fought tooth and nail to force him to take the cash.

    Worse they did not motivate this by arguing about the good the money does. Rather they argued that they had to spend the cash to spare their political masters “embarassment”.

    If it’s true it completely undermines the case for aid. If it’s not, one can only conclude that various DfID apparatchiks were desperately trying to ensure they kept their nice jobs in India* rather than risk being posted to some real armpit of a country where they might actually have to do some work.

    *A relatively civilised country where a diplomatic sahib may enjoy comfortable living, servants and a lifestyle not disimilar from that enjoyed by their predecessors under the Raj.

  • tankus

    Did read elsewhere that the French sweetened the deal with some nuclear technology ..

  • Patricia

    “sincerely I dont want ppl who leave India to live in Britain of all people.. i’d rather they move to Pakistan or China ….”

    and so say all of us.

  • anglophile

    1)The fighter deal had nothing to do with aid, Rafale had strong support from

    the Indian army for the following reasons
    (1.1) France never imposed sanctions on India over its N-tests in 1998
    (1.2) In 1999 India used French Mirages and Israeli smart bombs during Kargil

    war and France did not complain.
    (1.3)France offered TOT and cheaper price
    (1.4)And the final Nail in the Typhoon Coffin,Germany (along with Austria)

    REFUSED to sell SMALL ARMS to India citing human right abuses in


    9.html 7th para last line) Indian Arms Forces realized that its easier to

    deal with a pragmatic France then deal with 4 Nations, some of which could be

    so SELF-RIGHTEOUS as Germany.

  • Peter – Aus/India

    what he said was in 2010 and still news papers in UK are printing the article like he just said it yesterday.. pity…
    Also, its like “hungry fox” story for the UK people and electorate.. they are thinking giving AID to india automatically qualify them for any defense or other deals…
    Well in that cause UK should stop giving AID if thats what they use AID for.. may be thats why its answers why UK dont give AID to african country because there is no net return..
    Grow UP …

  • Observer

    @Jeremy: I just looked up Brahmos.

    Apparently, “It is the world’s fastest cruise missile in operation.”

    India and Russia jointly produce them.

    Although, there doesn’t seem to be any article in the news claiming that Argentina’s interested in them, at the moment…

  • WotNot

    Thank you, Daniel, for a thoughtful article that offers some facts about aid to India and sets straight some of the untruths peddled by Gilligan and his ilk.

  • Yogesh

    Wow.. You Brits are touchy.. Not that giving aid to India ever works with corruption so high.. I am sure it goes to some swiss bank account..

    But still, the fact that you think its your money.. You looted us for years.. Scr*w*d us every possible way… Killed millions.. Raped thousands.. and you expect us to profit you by buying your jets? It’d a thousand years till i forgive you for what you did to my grandfather and his ancestors generation.. You can get lost with your aid and all trade to india.. as for the indians living in your country legally and illegally, take that as the punishment for carrying for the largest revered genocide in the history of the world because sincerely i dont want ppl who leave India to live in Britain of all people.. i’d rather they move to Pakistan or China and be patriotic to that country than you folks..

  • Noa.

    It is curious that, if BAE Systems were to offer a bribe to Indian government representatives in an attempt to induce the purchase of Typhoon, it would be subject to the rigour of the Bribery Act; which, like climate change legislation, is another delayed action booby trap for British industry.

    In view of Mr Mitchell’s explanation that aid to India was intended to secure this military contact will he now be investigated by the CPS with a view to his prosecution in what appears to be a clear breach of the Act?

    Or, like a football manager, perhaps he has simply failed to recognise that what the Indians really wanted was just a bigger bung.

  • Fred

    The Typhoon lost because Rafale is a better fit for India’s requirements. Simples.

    The Indian government is in a weak position following the 2G scandal etc – so the IAF will get what it wants, and it wants Rafale.

    Rafale has a serious air-to-ground capability, an AESA, a carrier variant and it is almost 100% French (no US tech vulnerable to sanctions). Typhoon loses on all these counts.

    The IAF already operate Mirage 2000s and so there will be common subsystems (e.g. MICA) and pilot training will be easier.

    If Cameron seriously thought that the IAF would hand out a contract for fighters because of British aid to primary schools in Orissa he is delusional. Unlike the Saudis the IAF have had to (and will have to) fight real wars against competent opponents and can’t buy and old junk.

  • Richard Blogger

    The Indians have Russian designed nuclear submarines. Why weren’t people complaining that they had not bought British?

  • Peewit

    Everyone knows this aid uplift bullshit is just a Cameron sop to assuage the ‘nasty party’ image.

    The British armed forces, on the other hand, he is shafting because he and reedy Osborne hate them norne of Samuel Johnson explained envy.

    Vote UKIP for Britain’s sake.

  • Jeremy


    Argentina cannot “win back” what is not rightfully theirs in the first place.

    As for your wretched missiles, if they conform to the usual standards of Indian workmanship they will probably blow up in the faces of those attempting to use them.

  • Heartless Curmudgeon (Romantic also)

    So proud to be termed HEARTLESS by the o/s aid scam community (and a CURMUDGEON by the windmill scam crew)

  • David Cockerham

    Surely the real killer argument against giving aid to India is not that it won’t buy our jets or that it’s a major economy with a nuclear programme and a space programme. The killer argument is that Indian itself has an aid programme for other countries. I don’t care what DfID says; their is absolutely no case for our giving UK taxpayers’ money to India as long as India’s taxpayers’ money is being given in aid to other countries. If it’s our expertise and not or cash they need, fine; they can pay us for it. I couldn’t believe my ears the other day when I heard DfID more or less saying that we have to give aid to India not because the Indian government can’t afford to so what DfID is doing there to help the Indian poor but because it can’t be TRUSTED to do it. This kind of feather-brained tripe is what we expect from the far Left, not from the centre Right.

  • Kumar

    Please do not send aid to India. Not only we do not plan on buying the Typhoons; but we also plan to ship Brahmos Missiles to Argentina so they can sink HMS Dauntless and win back the Islands.

  • MaxSceptic

    Aid is a stupid waste.

    Bribes work.

  • EC

    Spot the difference:

    “As a Cabinet minister told me ….”
    Daniel Korski

    “I spoke to the German finance minister earlier today…”
    Peter O’HanraHanrahan

  • TrevorsDen

    ‘according to sources’! yes the usual unnamed sources.

    Nice to see someone at the Speccy giving the telegraph its due desserts.

  • Rhoda Klapp

    If they have a space programme, why should we give them aid? If they are the acclaimed economic miracle, delayed since 1947 by socialism, why should we give them aid?

  • Rhoda Klapp

    No, not if they buy French fighter planes why should we give them aid, but if they can afford ANY fighter planes, why should we give them aid.

  • Jeremy

    Daniel Korski:

    ‘…why is the story making the headlines now?’

    Interestingly, it was the MP who raised this matter at PMQs last week who contrasted the failure (thus far) of the Indians to buy Typhoon with the long term provision of aid to India by the UK. This did suggest to me that aid might be regarded as a sort of long-term “bung” – we give you aid, therefore you buy our planes. That sort of thing. If this is the case, then by failing to buy Typhoon the Indians are clearly not playing ball, and I suppose this might result in the amount of aid we give to India being reduced, or even stopped altogether.

    By the way, I think the Indians are in any case being foolish. Typhoon is clearly the better of the two planes and if the Indians are serious about their future defence capabilities then they will buy it.

  • Danielle

    If we do not win the contract in the end & the French do, then all aid to India should stop immediately, end of. Spend OUR money in Britain.

  • anthony.scholefield

    Just remind us of what the Thai government said in 2005 after the Tsunami when the British government pressed it to accept aid.

    Aid is nothing to do with helping third world coutries but all to doo with political posturing in metropolitan liberal circlea.

  • Tankus

    No …that they have a space and nuclear industry and that they are in a financial position to give aid to other country’s themselves (India aid to libya)

    Enough to stop surely !

  • Ryan

    Given that there has been 2250 comments in just 18 hours on the original Telegraph article I think this rather exercises the electorate.

    There’s a good number of Conservatives who don’t like this too.

  • Mr. Bubbles

    “officials at DFID, Britain’s Department for International Development, told the Indians that cancelling the [aid] programme would cause “grave political embarrassment” to Britain, according to sources in Delhi.”

    Incredible. They don’t want it. We don’t want to give them it. And yet we have to keep wasting colossal amounts of money we don’t even have for the sake of appearances.

    You couldn’t make it up.

  • John

    Nonetheless, time to cut and run.

  • jase

    so we are really going to give them planes free of charge. we give them aid money for them to may be spend it on planes from us? thats sounds like a labour policy to me. ask them to sell their nukes so we dont have to give them money and might help to get rid of the caste system too.

  • Yawn

    So BAE are still in with a chance and will need to push through in the next stages of bidding, including by showing greater life-time cost savings for the Typhoon over the Rafale.

    I am afraid-that is not how it works. There is no ‘next’ round of bidding. What the IAF has done is make a set of detailed calculations including lifecycle, spares, upgrades and weapons costs based on the unit prices quoted by the two vendors. The L-1 bidder was decided on these parameters, which are for legal purposes, final. What will happen now are negotiations with the L-1 bidder, Dassault. The only chance that the Eurofighter has is to hope that those negotiations collapse.

    The appalling lack of knowledge on how this process works is embarrassing to read.

  • Cynic

    The Rafale bid is just the ‘lowest bid’, not necessarily the best one.” Could French grease be better for Indian palms?