Finance Minister Nirmala Sitharaman on Sunday presented the Union Budget 2026–27, becoming the first finance minister to deliver nine consecutive budgets. Under the government’s Neighbourhood First policy, the Ministry of External Affairs (MEA) has been allocated ₹22,118.97 crore for foreign aid, marking a modest increase from ₹20,516.61 crore in the previous financial year. The Budget reflects notable changes in India’s financial assistance to neighbouring and strategic partner countries, with allocations rising for several nations while being reduced for others. India has significantly increased financial assistance to Bhutan, its closest strategic partner, allocating ₹2,288.55 crore.
Neighbourhood Aid Boost: Afghanistan, Nepal, Sri Lanka, Mongolia Allocations Rise
The enhanced support underlines the strong bilateral relationship, particularly in sectors such as hydropower and infrastructure development. Aid to Afghanistan has been increased threefold, from ₹500 million to ₹150 crore, reaffirming India’s continued commitment to humanitarian assistance and development support in the country. Nepal has received ₹8 billion, an increase of ₹1 billion from last year, while Sri Lanka has been allocated ₹4 billion, also up ₹1 billion. The enhanced allocation to Sri Lanka follows India’s recent financial assistance to help the island nation cope with Cyclone Ditwah. Mongolia has seen a fivefold increase in assistance, with its allocation rising from ₹5 crore to ₹25 crore.
