2026 Budget India : INR 4 bn. allocated to SL

2026-02-02 - 02:18

The Government of India has proposed a total of 4 billion Indian Rupees in grants and loans to Sri Lanka through the 2026/27 Budget. The allocation under “Aid to Countries” has been raised to INR 56.8 billion, about 4% higher than last year’s Budget Estimates of INR 54.8 billion. However, the outlay is around INR 1 billion lower than the INR 57.8 billion provided in the Revised Estimates for 2025–26, signalling tighter fiscal prioritisation. Among neighbouring countries, Bangladesh sees one of the sharpest reductions, with its allocation cut from INR 1.2 billion to INR 600 million. The reduction comes amid strained bilateral relations, even as aid to most other neighbours is maintained or increased. Bhutan remains the largest recipient of Indian aid, with its allocation rising by about 6% to INR 22.8 billion, reflecting continued support for hydropower and infrastructure projects. Nepal’s allocation increases by around 14% to INR 8 million, while Sri Lanka’s aid rises by about one-third to INR 4 billion, highlighting India’s role in the island nation’s post-crisis recovery.