Budget 2026: India Halves Aid to Bangladesh Amidst Strained Relations

• India's Union Budget 2026-27 significantly cuts foreign development assistance to Bangladesh, reducing it from 120 crore rupees to 60 crore rupees.
• This decision coincides with increasing reports of incidents and killings against minority Hindus in Bangladesh, contributing to strained bilateral relations.
• Bhutan remains the largest recipient of Indian aid, with its allocation increasing by 6% to 2,289 crore rupees, followed by Nepal, Maldives, and Sri Lanka.
• The total 'Aid to Countries' budget increased by 4% to 5,686 crore rupees, despite the cut to Bangladesh.
• No funds were allocated for the Chabahar Port project in this budget, a significant change given its strategic importance and previous allocations, possibly due to international pressure regarding Iran.

Why It Matters: India significantly reduced aid to Bangladesh in Budget 2026 amidst strained relations, while increasing support for other neighbors.