New Delhi: Finance Minister Nirmala Sitharaman’s Union Budget presented Saturday saw an increase in development assistance to Afghanistan and Myanmar, while aid to Myanmar was cut.
In the 2025-2026 budget, Maldives got a 50 percent raise to Rs 600 crore from Rs 400 crore announced last July. Similarly, Afghanistan saw its allocation doubled to Rs 100 crore.
Meanwhile, assistance to Myanmar has been cut from Rs 400 crore in the previous budget to Rs 350 crore. The country has been in the middle of a civil war since May 2021.
The allocation for Maldives is even higher than the 2024-2025 revised estimates of Rs 470 crore.
Ties between India and Maldives, which were tense during the first half of 2024, saw a diplomatic thaw towards the end of the year, which culminated in a state visit by Maldivian president Mohamed Muizzu in October last year.
The trip saw the two governments reboot ties, with India offering $400 million in a currency swap agreement and a second agreement worth Rs 3,000 crore to help the beleaguered Maldivian economy, which has been facing liquidity challenges. The Indian government also rolled over $100 million worth of loans last year.
However, New Delhi on Friday voiced concerns over Male’s recent enforcement of the China-Maldives Free Trade Agreement (CMFTA) and a preferential trade agreement inked with Turkey in November 2024.
“Recent agreements that are likely to result in revenue loss for the Maldives Government are, obviously, a matter of concern and do not bode well for the long term fiscal stability of the country. We would, obviously, need to take that into account while framing our own policies,” Ministry of External Affairs spokesperson Randhir Jaiswal had said at a press briefing.
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Diplomatic relations with Afghanistan warm up
Afghanistan also saw an increase in grant, as India in recent months has stepped up diplomatic interactions with the Central Asian country. Earlier in January, Foreign Secretary Vikram Misri met with the acting foreign minister of Afghanistan, Mawlawi Amir Khan Muttaqi in Dubai.
This is the first publicly acknowledged high-level interaction between India’s foreign secretary and a member of the Taliban regime in Kabul. India does not officially recognise the Taliban regime. However, New Delhi has maintained a technical mission in the Central Asian country since 2022.
During the Misri-Muttaqi meet, the Indian foreign secretary agreed to provide material support to Afghanistan, while promising to consider engaging in development projects in the near future. Misri also promoted the use of Chabahar Port to Afghan businessmen.
Last year, India and Iran signed an agreement to operate this port, which New Delhi has used to circumvent Pakistan in delivering aid to Kabul. India’s allocation for the development of Chabahar port remains Rs 100 crore, the same as last budget.
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Bhutan sees cut in loans, but remains largest beneficiary
Bhutan retained its top spot on grants and loans in the 2025-2026 budget. It allocated Rs 1,775 crore to the Himalayan kingdom as grant, while a further Rs 375 crore was allocated as loan.
The total amount of Rs 2,150 crore, which is higher than the 2024-2025 budget estimates, is about Rs 400 crore lesser than the 2024-2025 revised estimates.
Budget outlays for Nepal, Sri Lanka, and Bangladesh saw no change from the previous budget. The government has allocated Rs 700 crore for Nepal, while its allocations for Sri Lanka and Bangladesh were Rs 300 crore and Rs 120 crore respectively.
Mauritius saw its outlay increase from Rs 370 crore to Rs 500 crore, while there were small increases in the outlays for African, Eurasian and other developing countries.
(Edited by Tikli Basu)
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