India Shifts External Aid: Latin America Gains, Chabahar Port Sees Rs 400 Cr Write-off

• India's external assistance is increasingly directed towards Latin American countries, with allocations rising significantly from Rs 2.8 crore in FY23 to a budgeted Rs 120 crore in FY27.
• The share of Latin America in total external affairs spending is projected to grow from 0.1% in FY23 to 1.7% in FY27, indicating a diversification of India's development diplomacy.
• Assistance to Latin America has increased over 40-fold between FY23 and FY27, while allocations to Eurasian countries, Bangladesh, and Afghanistan have seen reductions.
• Chabahar Port, a strategic project, has incurred a significant fiscal drag with a Rs 400 crore write-off implied for FY25-FY26, a sharp increase from previous annual provisions.
• Bhutan remains the largest recipient of India's external assistance, accounting for Rs 2,289 crore (32.7%) in FY27, followed by Nepal, Sri Lanka, and the Maldives.

Why It Matters: India is rebalancing its external aid, boosting Latin American ties while facing a major write-off for Chabahar Port.