India allocates INR 7bn to Nepal in Union budget for 2025-26

KATHMANDU: India has allocated INR 7 billion (NPR 11.2 billion) to Nepal as development aid in its Union Budget for 2025-26, under its 'neighbourhood first' policy. Likewise, Bhutan and the Maldives are set to receive INR 21.5 billion and INR 6 billion, respectively.

India's total overseas development partnership portfolio amounts to INR 67.5 billion, with a significant portion earmarked for immediate neighbours, as reported by The Economic Times on Saturday.

The development aid has been allocated in line with India's 'neighbourhood first' policy.

India's Ministry of External Affairs (MEA) was allocated a total of INR 205.16 billion, in contrast to the current fiscal's budget estimate of INR 221.54 billion and the revised estimate of INR 252.77 billion.

Similar to 2024-25, INR 1 billion has been set aside for the Chabahar port project. Located in the Sistan-Balochistan province on Iran's energy-rich southern coast, the Chabahar port is being developed by India and Iran to boost connectivity and trade ties.

The total overseas development partnership portfolio for 2025-26 has been pegged at INR 67.5 billion, representing nearly 33% of the allocation made to the MEA.

The outlay for overseas development assistance marks an increase of about 20% over the current fiscal's allocation of INR 56.67 billion.

Interestingly, out of the total allocation under the overseas development partnership portfolio, INR 43.2 billion (64%) has been earmarked for immediate neighbours.

The amount will largely be spent on implementing a variety of initiatives, ranging from large infrastructure projects such as hydroelectric plants, power transmission lines, housing, roads, bridges, and integrated check-posts, to small-scale grassroots-level community development projects, as well as training and capacity-building programmes, according to officials.

According to revised estimates for 2024-25, Bhutan was allocated INR 25.43 billion.

In continuation of India's special relationship with the people of Afghanistan, an allocation of INR 1 billion has been made to that country.

The allocation to Afghanistan at the budget estimate stage for 2024-25 was INR 2 billion. However, revised estimates put the figure at INR 500 million.

For the next fiscal year, Bangladesh's allocation has been pegged at INR 1.2 billion, while Sri Lanka has been allocated INR 3 billion.

An allocation of INR 3.5 billion has been set aside for violence-hit Myanmar, while Mauritius has been pegged at INR 5 billion.