India Allocates Rs 12.8 Billion in Annual Aid to Nepal

India has allocated Rs 12.8 billion (INR 8 billion) in annual financial assistance to Nepal for the upcoming fiscal year 2026/27, which begins on April 1.

India’s Finance Minister Nirmala Sitharaman on Sunday, February 1, presented the Union Budget.

The southern neighbour had initially earmarked Rs 11.18 billion (INR 7 billion) for Nepal for the current fiscal year, which has been revised upward to Rs 13.28 billion (INR 8.3 billion).

Nepal remains the second-largest recipient of Indian financial assistance, while aid to Bangladesh has been sharply reduced. India has allocated INR 600 million to Bangladesh for the upcoming fiscal year, down from INR 1.2 billion announced a year ago for the current fiscal. The revised allocation for Bangladesh for the current year stands even lower at INR 344.8 million.

Bhutan continues to be the largest beneficiary of Indian aid, with an allocation of INR 22.88 billion for the next fiscal year. India had initially committed INR 21.5 billion to Bhutan for the current fiscal year, which has been revised down to INR 19.5 billion.

India has increased financial assistance to Sri Lanka to INR 4 billion from INR 3 billion in the current fiscal year. Aid to Afghanistan has also been raised to INR 1.5 billion from INR 1 billion.

In contrast, assistance to the Maldives has been reduced to INR 5.5 billion for the upcoming fiscal year, from an initial pledge of INR 6 billion for the current year, which has been revised to INR 6.25 billion.

Among other Asian countries, India has allocated INR 3 billion to Myanmar for the next fiscal year. For the current fiscal, India had initially set aside INR 3.5 billion for Myanmar, but it has been revised down to INR 2 billion.

Similarly, aid to Mongolia has been fixed at INR 250 million for the upcoming fiscal year, matching the revised allocation for the current year, but five times the initial pledge made a year ago.