India MEA To Spend Zero Money On Iran’s Chabahar Port Next Fiscal, Reduces Budget On Bangladesh Projects
India signals a pullback from Chabahar in the next fiscal as the foreign ministry reshapes its spending on overseas projects amid changing geopolitical pressures. Image courtesy: RNA
India’s foreign ministry will not spend even a single Rupee on Chabahar port in the 2027 fiscal, signalling a reducing engagement following US’s tariffs threat on nations doing business with Iran.
India’s Union Budget 2026-27 papers show India has allocated no money for Chabahar port development project for the next fiscal, whereas it had increased the spending there by four times to Rs 400 crore from the allocated Rs 100 crore in budget 2025-26.
The spending by the Ministry of External Affairs on Chabahar was part of India’s aid to friendly countries and regions, and was classified under the ministry’s revenue expenditure in the previous years.
What could be the reason for India’s zero aid to Chabahar?
Earlier this month, US President Donald Trump had warned a 25% tariff on any nation doing business with Iran, in the wake of his threat to militarily intervene in the West Asia nation in support of citizens protesting against the government since December 2025.
He did not clarify if the previous exemption given to India for its work in Chabahar port development would continue.
India has in the recent years reduced its oil imports from Iran, and has heavily relied on Russia for its energy needs.
How India reduced aid to recalcitrant Bangladesh
However, in the case of Bangladesh, with which India’s ties have deteriorated since the ouster of former Prime Minister Sheikh Hasina in late 2024 and her asylum in New Delhi, the aid was reduced by half to Rs 60 crore that last year’s allocation of Rs 120 crore.
In fact, India spent only one-third of its allocated aid money for Bangladesh in the current fiscal under the revised budget, amounting to Rs 34.48 crore.
How India increased spending in Maldives
Also interesting was the fact that India increased its support for Maldives, where its President Mohamed Muizzu won the 2023 elections on an anti-India plank, but has since improved Male’s ties with New Delhi.
India spent more than the 2025-26 budgeted aid of Rs 600 crore by adding another Rs 26 crore to the spending, and reduced the aid for 2026-27 to Rs 500 crore.
How India supported other neighbours in South Asia?
However, other countries that have got India support have seen a steady rise in the aid amount budgeted.
Support to Afghanistan grew by 50% from Rs 100 crore in FY26 to Rs 150 crore in FY27.
Since the Taliban takeover in 2021, India had steadily built its ties with the rulers in Kabul, and the two sides had just months ago decided to upgrade each other’s mission by posting senior diplomats to head them.
Bhutan, which faces a similar military threat from China from its occupied territory of Tibet, saw a steady rise in the aid from Rs 2,150 crore this fiscal to Rs 2,288 crore next fiscal.
India, under a bilateral agreement, has gone in support of Bhutan, with its military whenever it had faced a crisis in defending its territory from Chinese PLA, such as the Doklam crisis in 2017.
How much MEA got in the FY27 budget?
The Union Budget, presented by Finance Minister Nirmala Sitharaman in parliament, increased the budgetary allocation for MEA by 7.8% to Rs 22,118 crore from FY26’s Rs 20,516 crore.
MEA’s capital expenditure too witnessed a nearly 50% increase from Rs 996.88 crore to Rs 1,412 crore in FY27.
