Indicating a freeze on India’s activities in the port of Chabahar, the Union Budget has made no allocation for the port in Iran in 2026-27. Chabahar had received ?400 crore in allocation in the previous fiscal. Earlier in January, Indian officials here had stated New Delhi remains engaged with Tehran and Washington D.C. to work out a solution after American President Donald Trump announced on January 12 that any country that trades with Iran will end up paying 25% additional tariffs while trading with the U.S.

Union Budget 2026 LIVE

The downturn in India's relations with Bangladesh is also reflected in the Budget, with allocation halved to ?60 crore (from ?120 crore) for projects in Bangladesh in the coming year

Bhutan continued to top allocation at 22,288.55, an increase of ?138.56 crore over last year.

India's annual allocation for Bhutan supports several developmental activities and infrastructure projects.

Myanmar, another conflict-hit country in India's neighbourhood, has also seen a cut in allocation, down to 1300 crore this year from last year's 1350 crore.

Sri Lanka, on the other hand, receives ?400 crore this year, an increase of 100 crore.

Nepal, which experienced political turbulence in 2025, has received 2800 crore, an increase of 2100 crore over the allocation last year.

The Ministery of External Affairs has been allocated 21,292 crore for international training programmes that are increasingly being seen as an important part of India's soft diplomacy. Officials from other countries are trained in these programmes, which form a bridge between the Indian and foreign states.

Source: The Hindu

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