India Cuts Financial Aid to Bangladesh by 50% Amid Diplomatic Tensions

In the 2026-27 budget, the Indian government has significantly reduced its financial aid to Bangladesh, bringing the amount down to 600 million Indian rupees—a 50 percent decrease in assistance.

Indian media reports indicate that this decision follows diplomatic tensions between the two countries. According to these sources, relations between New Delhi and Dhaka have cooled since the removal of Sheikh Hasina, the former Prime Minister of Bangladesh, in 2024.

The reports also suggest that another factor behind the reduction in India’s aid is Bangladesh’s growing closeness to Pakistan; an issue that Indian officials believe has affected regional political dynamics and cooperation.