South Wales Police says "new and significant information came to light" which led to the case against John Clifton Davies to be dropped.
He has criticised the force for holding him for 16 months without bail, before finally speaking to key witnesses.
In 2010, South Wales Police launched an investigation into the death of 39-year-old Colette Davies which occurred in India in 2004.
Following a joint investigation with Himachal Pradesh State Police in Northern India and in consultation with the Crown Prosecution Service, a 50-year-old man was charged with her murder and fraud.
During the investigation which continued following the charge, new and significant information came to light which has been reviewed by the CPS.
As a result of this review it has now been decided that proceedings will be discontinued.
More top news
John Atkinson has resigned - but insists that his decision is about workload and nothing to do with recent problems within the Welsh party.
Amelia's mum Sarah Jones described how her dad was "panicking" when he told her the baby was "not breathing".
Former rugby star Ian Gough has won an assault appeal against former Miss Wales and ex-girlfriend Sophia Cahill.