India has slashed its aid allocation for Bangladesh by half to Rs 60 crore in the Union Budget 2026‑27, down from Rs 120 crore in the previous fiscal year, according to reports from NDTV.

Indian Finance Minister Nirmala Sitharaman, presenting her ninth budget in parliament today, focused on manufacturing growth and job creation.

In contrast to Bangladesh’s reduction, Bhutan remains the largest recipient of Indian aid, with its allocation rising by about 6% to Rs 2,289 crore, according to Indian newspaper Business Today.

Nepal's allocation has been increased by around 14 percent to Rs 800 crore, while Sri Lanka receives Rs 400 crore -- about one-third higher than earlier levels.

The Maldives sees an 8% cut to Rs 550 crore. Aid support for Afghanistan has been held steady at Rs 150 crore, with the outlay largely tied to humanitarian assistance. Myanmar's allocation is reduced by about 14% to Rs 300 crore.

The reduction for Bangladesh comes amid strained bilateral relations following the ouster of the Awami League regime on August 5, 2024, while Dhaka’s ties with Pakistan have improved.

Since the political change in Dhaka, India has restricted tourist visas for Bangladeshis and recently withdrew families of Indian diplomats from Bangladesh, citing security concerns ahead of the February 12 elections.

Meanwhile, consular services at Bangladesh missions in New Delhi, Kolkata, and Agartala remain suspended following demonstrations near the missions.