The Indian programme had been frozen "so for the first time this year since the war (World War II) it is not Britain's largest development programme," said Andrew Mitchell, the International Development Secretary.
Mitchell was quoted as saying by BBC 1 that he did not think that Britain would continue to fund programmes in India "for very much longer".
The David Cameron-led government has come under pressure to explain why British taxpayers are giving millions to countries like India at a time of public sector cuts. The criticism comes as public spending cuts have led to job losses in the UK.
India has been singled out because of increasing prosperity and the fact that it has a nuclear programme.
Several lawmakers have voiced public criticism to give aid to an India whose economy is growing exponentially, and is now in a position to give aid to many African countries.
Mitchell said the aid programmes are massively scaled up by the Indian taxpayer.
"British know-how is making a huge contribution. Now is not the time to stop the programme in India but I don't think we will be there for very much longer," he said in an interview.
"India is a place where there are more poor people than the whole of sub-Saharan Africa," he said, adding "Britain's programme shows how we can get more people into school, and women particularly."
According to an earlier report, the Cameron government has decided to continue the present level of aid to India – 280 million pounds per year– until 2015 despite a welter of protests.
The government has decided against any cuts to the aid which will amount to over 1 billion pounds until 2015.
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