India maintains aid to Bangladesh despite cuts in foreign assistance

Despite a decline in bilateral relations following Sheikh Hasina’s removal from power, India's allocation for Bangladesh remains unchanged, Indian Express says

Despite reducing foreign aid allocations in its 2025-26 budget, India has kept its financial support for Bangladesh unchanged.

For the upcoming fiscal year, India has allocated Rs 54.83 rupees for foreign aid, down from Rs 58.06 billion in the current fiscal year.

According to The Indian Express, Bangladesh will receive Rs 1.2 billion in the next fiscal year—the same amount allocated in the current budget.

The publication noted that even though bilateral relations have deteriorated after Sheikh Hasina’s removal from power, India has made no changes to Bangladesh’s allocation.

On Saturday, India’s Finance Minister Nirmala Sitharaman presented the national budget in Parliament (Lok Sabha). India’s fiscal year runs from Apr 1 to Mar 31.

This marks Narendra Modi’s first budget after securing a third prime term in the 2024 general elections.

India’s Ministry of External Affairs manages foreign aid allocations, receiving a total budget of Rs 205.16 billion for the new fiscal year.

REGIONAL AID ALLOCATIONS

The Indian Express reported that in 2023-24, India allocated a higher amount—Rs 1.37 billion—to Bangladesh.

Nepal remains the largest recipient of Indian aid, with Rs 21.5 billion allocated for hydropower projects, economic cooperation, and infrastructure development—slightly down from Rs 20.68 billion in the current fiscal year.

In an effort to strengthen diplomatic ties, India increased its aid to the Maldives, raising the allocation by Rs 1.3 billion to Rs 6 billion for the next fiscal year.

REDUCED AID FOR AFGHANISTAN AND MYANMAR

For Afghanistan, the Indian aid was slashed from Rs 2 billion to Rs 1 billion. Two years ago, the allocation stood at Rs 2.07 billion.

Due to ongoing political instability, India cut its aid by Rs 500 million to Rs 3.5 billion.

Sri Lanka and Africa saw adjustments, with the Indian Ocean island nation getting Rs 3 billion as it continues to recover from its economic crisis.

India’s aid increased by Rs 250 million to Rs 2.25 billion, reflecting India’s strategy to expand influence in the region.

Meanwhile, Latin America’s aid budget has been cut from Rs 900 million to Rs 600 million, according to India’s Ministry of Finance.