Why Bhutan, Nepal & Maldives dominate India's foreign aid budget

India’s budgetary allocation in terms of aid to foreign countries saw Bhutan topping the list once again with the government earmarking Rs 2,068 crore for its northeastern neighbour, which is being courted assiduously by China. While it’s Rs 330 crore less than the revised allocation for Bhutan for the previous year, it’s still significant given that Nepal, the second country on the list, was allocated only Rs 700 crore.India remains Bhutan’s most important development partner and earlier this year pledged Rs 10,000 crore assistance for Bhutan’s 13th Five-Year-Plan. The overall allocation by the government for external affairs stood at Rs 22,154 crore, considerably more than the original Rs 18,050 crore for 2023-24 but less than the revised figure of Rs 29,121 crore for the same year. Out of the Rs 22,154 crore for external affairs in the year 2024-25, Rs 4,883 crore has been earmarked for aid to countries. This is about Rs 525 crore less than the figure for the previous year but the fresh allocation is expected to be revised later.These estimated expenditures are not cast in stone and are often revised later in the year, depending upon progress in projects, or lack thereof, the Indian government is implementing abroad.Nepal’s share increased from Rs 550 crore (revised later to Rs 650 crore) to Rs 700 crore, but a significant increase in allocation, from Rs 150 crore to Rs 245 crore, came for Sri Lanka, the Indian Ocean country which managed to tide over its economic crisis with assistance worth $4 billion from India. The Rs 245 crore allocation is even more significant, given that India had later revised the Lankan share for the previous year from Rs 150 crore to only Rs 60 crore. In the case of Seychelles, a country India has been looking to ramp up its defence and security ties with in the Indian Ocean, India increased its estimated expenditure from Rs 10 crore to Rs 40 crore.In the case of Maldives, a country India has had troubled relations with in the past nine months, the allocation was Rs 400 crore. In 2023-24, India’s estimated expenditure was the same for the Maldives, although later it was revised to Rs 770 crore. Maldives President Mohamed Muizzu has been urging the Modi government to expedite work on Indian projects, including the landmark Greater Male Connectivity Project. In Myanmar, which has been rocked by violence between the military junta and rebel forces, the allocation went down from Rs 400 crore to Rs 250 crore. India’s allocation for the strategic Chabahar port in Iran remained unchanged at Rs 100 crore. !function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r Here's a look at allocations for other key regions:Africa: India has cut down its expected expenditure in Africa, where China remains a major competitor, from Rs 250 crore to Rs 200 crore. This is not really significant, given that the government had earlier revised its allocation for 2023-24 to Rs 180 crore. So, it’s actually gone up by Rs 20 crore from the revised estimate. India has been working hard to expand its footprint in Africa by investing in projects related to irrigation, drinking water, railway infrastructure and power and textile plants. Work has been completed so far on 206 projects in 43 African countries. 65 more are being implemented under Indian concessional loans with a total outlay of over US $ 12.37 billion. There are over 80 projects on which work is expected to start soon. Possibly the biggest takeaway from India’s presidency of G20 last year, as India projects itself as the leader of the Global South, was the inclusion of the African Union in the group.Eurasia: While India is working to expand its economic ties and connectivity with Central Asian countries in the region, the budget for the region has been slashed to Rs 20 crore from the Rs 75 crore that was announced for the previous year. According to government sources, this is again linked to lack of progress in some of the projects being implemented and the allocation will be ramped up as and when required.Latin America and other developing countries: In the case of Latin America, the budgetary allocation is Rs 30 crore, which is almost the same as the revised estimate for the previous year but less than the original estimated expenditure of Rs 50 crore. At a time India is competing with China for the leadership of the Global South, the government has allocated Rs 125 crore for other developing countries. This is Rs 30 crore more than the revised estimate for last year but less than the original 2023-24 allocation of Rs 150 crore.