The International Commission for Aid Impact (ICAI) has published a new report on UK Aid to India that it says ‘raises significant concerns’ on the lack of transparency, and governance processes of British International Investments (BII).
The report is a follow up to the ICAI review of UK aid to India published last year, to see what progress has been made on its recommendations. One of the findings was that the £1 billion of UK aid invested in India by BII in the period between 2016 and 2021 (constituting 28% of BII’s global portfolio by value) did not have a clear link to inclusive growth or poverty reduction.
Criticism of investments
ICAI details that despite recent assurances from BII’s CEO that future investments in India would only be made if there was a “compelling argument” on inclusion and sustainability, BII has made investments in a fund that includes a cosmetics company, debt collection agency and a social media site hosting content including ‘glorification of Hamas’s attacks on Israel, abuse of women and offers of sexual services.’
Professor Lyla Mehta, IDS Research Fellow, said in response to the findings:
“ICAI’s findings raise some huge red flags regarding UK aid investments in India through British International Investments (BII). FCDO and BII must urgently put in place robust governance procedures to ensure that all UK aid to India supports poverty reduction, sustainability, democracy and social inclusion.
“Despite impressive growth figures, there remains extreme poverty and inequality in India. FCDO must use what limited ODA it has to support the poorest in India gain access to basic services such as food, water, health care and sanitation, and address climate change impacts.”
In addition to the criticisms of BII, ICAI has found that FCDO was making positive progress regarding climate finance in India. Describing ‘some encouraging progress on climate finance, with a £1 billion UK guarantee to the World Bank to support clean energy investment and India’s climate transition, and investments from BII in electric vehicles.’
ICAI also welcomed FCDO’s commitment to supporting Indian civil society groups in areas such as court reform, LGBT+ rights and digital media.