New Delhi: The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman on Sunday, brought bad news for Bangladesh.
As diplomatic tension with our eastern neighbour escalated over violence against minority Hindu community following the fall of Prime Minister Sheikh Hasina’s regime and her fleeing to India in August 2024, there has been a perceptible shift in Dhaka’s foreign policy toward Pakistan.
India has now decided to rework its overseas development assistance in the Budget, significantly reducing its allocation for Bangladesh.
In a steep cut, India has reduced aid for Bangladesh by 50 per cent — from Rs 120 crore to Rs 60 crore.
This is in sharp contrast to India’s policy of maintaining or increasing assistance for most other neighbouring countries.
Of the Rs 120 crore allocated for Bangladesh in the last financial year, only Rs 34.48 crore was actually spent due to tense bilateral relations.
The total allocation under ‘Aid to Countries’ has been raised 4 per cent – from Rs 5,483 crore to Rs 5,686 crore – compared to last year’s Budget, reported India Today.
Bhutan remains the largest beneficiary of Indian aid, with its allocation increased 6% to Rs 2,289 crore, to support hydropower and infrastructure projects.
Nepal’s allocation was increased 14% to Rs 800 crore, and Sri Lanka’s aid was up by around one-third to Rs 400 crore.
As for Indian Ocean region, India reduced allocation for the Maldives by 8% to Rs 550 crore, while Mauritius benefited from a 10% increase.
Aid to Afghanistan was unchanged at Rs 150 crore, mainly for humanitarian support, while Myanmar’s allocation has been cut by around 14% to Rs 300 crore.
India’s assistance to African countries was kept at the previous figure of Rs 225 crore. Funding for Latin America has been doubled to Rs 120 crore and aid for Eurasian countries was slightly down, to Rs 38 crore.
