The Indian government has slashed the financial aid provided to some neighbouring countries, including the Maldives, Myanmar, Bangladesh, and Afghanistan, for the year 2024-25. At the same time, it has significantly increased grants for Sri Lanka, Mauritius, Seychelles, and Nepal.
The strained ties between India and Maldives have adversely impacted the financial assistance provided to Maldives. The Union Budget documents show that the quantum of aid provided to this nation of islands has been cut by 48 per cent for the 2024-25 fiscal when compared to last year. The budget has allocated ₹400 crore as “grants” to Maldives during the current fiscal which is a far cry from the ₹770 crore extended a year ago. This budgetary allocation is ₹200 crore less than the allocation made by the government during the interim budget presented in February 2024. The reduction in allocation comes following the election of Mohamed Muizzu, known for his pro-China stance as the president of Maldives.
This year’s maximum aid has been proposed to be given to Bhutan, whose King Jigme Khesar Namgyel Wangchuck and Prime Minister Tshering Tobgay are on a three-day visit to Gujarat. The tiny country nestled in the Himalayas will receive ₹2,068 crore during 2024-25, which includes a grant of ₹1,078 crore and a loan of ₹989 crore. This is 14 per cent less compared to ₹2,399 crore given by India during 2023-24.
It is not just the Maldives and Bhutan that will receive less assistance from India this year. Bangladesh, Afghanistan and Myanmar are also slated to get fewer grants. While a provision of ₹200 crore for Afghanistan (less by 9 per cent compared to last year), Bangladesh will receive ₹120 crore (less by 7.6 per cent) and Myanmar ₹250 crore (less by 32 per cent).z
Among the countries expected to receive more grants from India include Sri Lanka, which is slated to receive ₹245 crore, more than 300 per cent of the aid it received in 2023-24. Seychelles and Mauritius, located in the Indian Ocean, are expected to get a higher quantum of aid during 2024-25. Nepal will receive ₹700 crore (up by 7.6 per cent compared to last year), Mauritius ₹370 crore (up by 12 per cent) and Seychelles ₹40 crore (up by 300 per cent).
Meanwhile, India will continue to provide a grant of ₹100 crore for the Chabahar port in Iran, for which India and Iran recently signed a 10-year contract for port operations. It will also provide ₹200 crore to “African countries”, ₹30 crore to Latin American countries and an additional ₹20 crore to Eurasian countries.