India is currently the biggest recipient of UK development aid, receiving more than £800m (about $1.25bn) over the three years to 2011.
Foreign Secretary Nirupama Rao told the BBC no final decision had been made.
Britain’s Department for International Development (DfID) says it is reviewing its spending, and close dialogue with the Indian government will continue.
The BBC’s Chris Morris in Delhi says there are those who argue that a country like India, which has an economy growing at nearly 10% a year and a massive defence budget, simply does not need British development assistance. Read more at…