Amid strained relations with Bangladesh, India halved aid to its neighbour by half as Union Finance Minister Nirmala Sitaraman announced the Union Budget for FY 2016-27 on Sunday.
The budget allocation under “Aid to countries” for the year was increased to Rs 5686 crore, which is about 4 per cent higher than last year’s Budget estimates of Rs 5483 crore.
However, the outlay this year was Rs 100 crore lower than the Rs 5785 crore provided in the revised estimates for 2025-26.
The allocation for Bangladesh was the most visible reduction, with its aid cut from RS 120 crore to Rs 60 crore.
The reduction comes amid heightened tensions and bilateral relations, especially after the ousting of its former leader, Sheikh Hasina. Hasina is currently in exile in India, and Bangladesh’s interim government has been demanding that she be extradited to face justice.
India also asked Bangladesh to ensure that its minority Hindu population is safe.
Apart from Bangladesh, another noticeable change in the allocation was for Iran. The central government has not allocated anything towards the Chabahar port in Iran despite the ten-year agreement signed by New Delhi with Tehran to operate the Shahid Beheshti terminal in the country. This comes amid the heightened number of protests and Tehran's tensions with the US.
Meanwhile, aid for other neighbours has been increased. Bhutan has continued to be the largest recipient of aid, with its allocation rising about 6 per cent to Rs 2289 crore. Nepal, Sri Lanka and Myanmar have been granted about Rs 800 crore, Rs 40 crore and Rs 300 crore respectively. The Maldives and Mauritius have been granted Rs 550 crore each, Afghanistan Rs 150 crore, Mongolia Rs 25 crore, African countries Rs 225 crore, and Seychelles Rs 19 crore.