JOIN USInternational Development Secretary Andrew Mitchell has signalled that the "250 million pounds of public money spent annually on nuclear-armed India could be scaled back."
He said the rich NRI population of Britain could do more to help their countrymen.
Besides, the 40 million pounds spent by the Department for International Development (DFID) in Vietnam, now regarded as an Asian "tiger" economy, will be axed.
It follows the disclosure that development funding to China and Russia would be withdrawn.
Mitchell told The Sunday Times: "India is more complex and more difficult than China. But this is a (aid) programme I am looking at in detail."
He defended the government's decision to ring-fence overseas aid while most other departments face savage cuts.
Last month, Britain, shocked by reports of massive embezzlement in India in the use of millions of pounds granted as aid for 'sarva-shiksha abhiyan', promised "zero tolerance to corruption" and launched an "immediate inquiry".
Mitchell had then said in a statement to PTI that the allegations reported from India about widespread corruption in the use of British aid were "shocking".
"These are shocking allegations. I have launched an immediate inquiry to ensure British aid money has not been misused. The new British Government will have a zero tolerance policy to corruption," he had said.
"When I took up this job ... I made a pledge to British taxpayers; they must know that for every pound of their money, we will get 100 pence of value."
Cutting foreign aid to countries like India was the most important suggestion by voters to Chancellor George Osborne, who launched a Treasury's Spending Challenge website to ask people for ideas on where the funding cuts axe should fall.
As hundreds of suggestions poured in, the most popular was for international development funding to bear some of the brunt of the pain.
Jo Johnson, a Conservative MP and brother of London Mayor Boris Johnson, wrote in The Financial Times: "India can now fund its own development needs, considerable though they are in a country with 450 million poor. It has a defence budget of USD 31.5 billion, plans for a prestige- boosting moon-shot and a substantial foreign aid programme of its own".
He added: "India is not China; but as a claimant to a permanent Security Council seat and a place at the top table of world affairs, it is also no longer a natural aid recipient".
Johnson wrote that nowhere was the need to bring the India-UK relationship up to date more obvious than in the area of aid.
"The moral arguments might be finely balanced, but common sense suggests it is a better idea for the UK to prioritise aid to countries that cannot afford to fund their development over those that take the money because it is going free. Many other donors have in recent years either been kicked out of India for being too small or, like the US, whose aid flows peaked in 1960, stated they are 'walking the last mile' in India.
"The UK accounts for almost 30 per cent of all foreign aid to India. A bit of tough love in the new special relationship should end this anachronism," he said.
As the government announced average cuts of 25 per cent in spending over five years under plans to tackle the UK's record deficit, only the health service and foreign aid have been told they are safe from the reductions.