Financial aid to Bangladesh has been halved in the Union budget for 2026-27 after around 72 per cent of the allocation for the current fiscal remained unused amid a strain in bilateral relations.

Against the budgetary estimate of ₹120 crore set aside for Bangladesh in 2025-26, the allocation this time is ₹60 crore. This is still nearly double the revised estimate of ₹34.48 crore for the current fiscal. No explanation is usually provided in budget documents for such drastic cuts, but the reduction comes at a time New Delhi’s relations with Dhaka have hit a low following the ouster of former Prime Minister Sheikh Hasina in August 2024 and her taking refuge in India.

Aid to countries includes India's multilateral and bilateral aid and assistance programmes to neighbouring and other developing countries in Africa, Central Asia, South Asia and Latin America. It also includes aid for disaster relief and humanitarian aid.

Allocation for aid to countries in the budget for 2026-27 totals ₹5,685.56 crore, nearly half of which goes to Bhutan. The increase in allocation for aid to countries is marginal at ₹200 crore, though the revised estimates for this fiscal were about ₹300 crore more than the initial allocation of ₹5,483 crore.

Afghanistan has seen an increase in allocation, aligning with India’s increased engagement with the Taliban regime in Kabul. The budgetary estimate for the next fiscal has been raised by ₹50 crore to ₹150 crore.