In line with India’s neighborhood first policy and a significant boost to some neighboring countries, the budget allocation for the Ministry of External Affairs saw increased funding for Nepal and Sri Lanka.
Nepal will receive ₹700 crore, up from the revised ₹650 crore allocated last year, while Sri Lanka’s allocation increases to ₹245 crore, a rise of ₹95 crore from the previous year.
India’s Assistance to Sri Lanka
It is crucial to note that New Delhi’s assistance has played a critical role in Sri Lanka’s economic recovery, including a credit line close to $4 billion in 2023.
The allocation for each country is primarily based on their specific development and infrastructure needs.
Budget Allocations and Changes
SE Asia saw a significant increase of ₹30 crore, bringing its total allocation to ₹40 crore for development projects in 2024-25.
Conversely, Bhutan and Myanmar witnessed a notable decrease in budget allocation. Myanmar, which utilized ₹370 crore out of ₹400 crore allocated last year, now receives ₹250 crore.
Bhutan, however, remains a major beneficiary with ₹268 crore allocated this year, reflecting a continuation from last year’s substantial funding.
Changes in Allocations Across Neighboring Countries
Other neighboring countries such as Bangladesh, Maldives, and Mongolia experienced declines in their budget allocations.
Afghanistan and Maldives received consistent allocations of approximately ₹200 crore and ₹400 crore, respectively.
Challenges in India-Maldives Relations
Relations with Maldives have faced challenges, with tensions rising since President Mohammad Muizu was elected in November 2023. This has cast uncertainty over India’s long-standing friendly relations with the country, affecting budgetary considerations.
Continued Support for Critical Infrastructure
India continues to support the development of the Chabahar port in Iran, with a steady allocation of ₹100 crore annually over the last three years. This consistent funding underscores India’s commitment to bolstering critical infrastructure projects and its strategic relations.
The total aid stands at ₹48,356 crore, marking a decrease of over ₹500 crore compared to last year’s budgetary allocation.