From the Guardian, the U.K.’s development secretary Justine Greening explains some of the reasons behind the decision.
"After reviewing the programme and holding discussions with the government of India this week, we agree that now is the time to move to a relationship focusing on skills sharing rather than aid," Greening said.
"Having visited India, I have seen first-hand the tremendous progress being made. India is successfully developing and our own bilateral relationship has to keep up with 21st-century India. It's time to recognise India's changing place in the world.
"It is of course critical that we fulfil all the commitments we have already made and that we continue with those short-term projects already under way which are an important part of the UK and government of India's development programme."
The move follows criticism of the government for maintaining aid to India, which has a booming economy and its own space programme. It will delight Conservative MPs critical of David Cameron's commitment to spending 0.7% of national income on overseas aid.
The changes will mean Britain spending about £200m less from 2013 to 2015 than had been planned by the former international development secretary Andrew Mitchell.