India allocates Rs 600mn grant for Bangladesh in new budget

India has increased its grant allocation for Bangladesh by 74 percent in its proposed budget for the new financial year. For FY 2026–27, India has proposed a grant of Rs 600 million for Bangladesh. Despite the increase, Bangladesh remains the lowest recipient of Indian assistance among South Asian countries.

According to Indian budget documents, the allocation has been made based on the requirements of the Ministry of External Affairs (MEA). In the revised budget for FY 2025–26, Bangladesh received Rs 344.8 million in assistance. Although the MEA initially proposed a grant of Rs 1.2 billion for Bangladesh in the original budget, the amount was later reduced in the revised budget.

The documents show that Bhutan remains the largest recipient of Indian assistance in South Asia, with a total allocation of Rs 22.8856 billion—Rs 17.69 billion as grants and Rs 5.2 billion as loans. Bhutan received Rs 19.5 billion in the previous fiscal year.

Nepal ranks second with an allocation of Rs 8 billion, followed by the Maldives with Rs 5.5 billion, down from Rs 6.25 billion last year. Sri Lanka is fourth with Rs 4 billion, an increase of Rs 1 billion. Myanmar ranks fifth with Rs 3 billion, up from Rs 2 billion, while Afghanistan is sixth with Rs 1.5 billion, an increase of Rs 500 million.

Analysts say grant allocations are closely linked to a country’s economic condition. Due to Bangladesh’s current economic situation, many countries are reducing grants and offering loans under stricter conditions. India has largely supported Bangladesh over the past decade through Lines of Credit (LoC).

As per tradition, India’s Finance Minister Nirmala Sitharaman presented the budget for FY 2026–27 on Sunday (1 February). The total budget size has been set at Rs 535 trillion, a 7.7 percent increase from the previous fiscal year. India’s financial year runs from 1 April to 31 March.