India Raises Budget Support For Nepal, Afghanistan; While Reducing Allocation For Bangladesh

The Union Budget 2026-27 signals a recalibration of India’s development assistance to neighbouring and strategic partner countries.

The government has increased allocations for nations such as Nepal, Afghanistan, Bhutan, Sri Lanka and Mongolia, while reducing financial support for Bangladesh and a few other regions.

India has raised development aid for Bhutan to ₹2,288.56 crore, reaffirming its long-standing partnership with the Himalayan kingdom.

The budget has also increased assistance to Afghanistan from ₹100 crore to ₹150 crore, indicating the likelihood of additional Indian-funded development projects in the country.

Nepal has received an allocation of ₹800 crore, reflecting a ₹100 crore increase over the previous year.

The government has also enhanced support for Sri Lanka to ₹400 crore, up from ₹300 crore in the last budget, underlining India’s continued engagement in the island nation’s economic recovery.

India has significantly expanded assistance to Mongolia, raising the allocation from ₹5 crore to ₹25 crore.

This increase highlights New Delhi’s intent to deepen ties with strategically important partners beyond South Asia.

In contrast, the budget has cut financial support for Bangladesh by ₹60 crore.

The allocation has been reduced from ₹120 crore to ₹60 crore. India has also lowered assistance to the Maldives from ₹600 crore to ₹550 crore and trimmed support for Myanmar from ₹350 crore to ₹300 crore.

The government has reduced financial allocations for Eurasian countries to ₹38 crore.

At the same time, it has increased support for Latin American nations to ₹120 crore, reflecting a shift in regional priorities.

The Union Budget has also strengthened India’s diplomatic apparatus.

The Ministry of External Affairs (MEA) has received an allocation of ₹22,118.97 crore. This is higher than ₹20,516.62 crore in the previous fiscal year.

While presenting the budget in Parliament, Finance Minister Nirmala Sitharaman outlined three guiding ‘Kartavyas’ or duties.

She said these principles aim to accelerate economic growth while empowering the poor and the underprivileged.

Finance Minister Sitharaman said the government drew inspiration from these duties while preparing the budget.

She said this is the first budget prepared in Kartavya Bhavan and aligns fiscal policy with national resolve.

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