On February 1, 2025, Indian Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year 2025–2026. In this budget, the allocation for Nepal under the Ministry of External Affairs remains at Rs 700 crore, the same as the previous fiscal year. This follows an increase from Rs 657.38 crore in 2023–2024 to Rs700 crore in 2024–2025.
Among India’s neighboring countries, Bhutan continues to receive the highest grant, with an allocation of Rs 2,150 crore, though this represents a reduction from previous years. The grant for Afghanistan has been increased from Rs 50 crore in the last fiscal year to Rs 100 crore in the current budget. Allocations for Bangladesh and Sri Lanka remain unchanged at Rs 120 crore and Rs 300 crore, respectively. The Maldives has seen a significant increase in its grant, from Rs 470 crore in the previous fiscal year to Rs 600 crore this year. Conversely, the grant for Myanmar has been reduced from Rs 400 crore to Rs 350 crore, while the allocation for Mongolia remains steady at Rs 5 crore.
India’s foreign aid strategy reflects its diplomatic priorities and regional relationships. The consistent allocation for Nepal underscores the ongoing partnership between the two nations. The increased grants to Afghanistan and the Maldives indicate India’s commitment to supporting development and stability in these countries. Reductions in aid to Bhutan and Myanmar may reflect shifting dynamics or reassessments of needs and bilateral relations.
Overall, India’s foreign aid allocations aim to strengthen regional ties and promote development among its neighboring countries.
