Budget 2026-27: India cuts outlay for Iran’s Chabahar port to zero, halves Bangladesh aid amid strained ties

The Ministry of External Affairs (MEA) has been allocated a total of Rs 22,118 crore against the current fiscal's budget estimate of Rs 20,516 crore and a revised estimate of Rs 21,742 crore.

2 min readUpdated: Feb 1, 2026 09:51 PM IST

Unlike the last few years, no allocation has been made for the Chabahar port project in Iran. (Wikimedia commons)

Amid strained bilateral ties, India has not allocated any fund for the Chabahar port project in Iran and slashed the development assistance for Bangladesh to Rs 60 crore in Union Budget 2026-27.

The total amount allocated to Ministry of External Affairs (MEA) is Rs 22,118 crore against the current fiscal’s budget estimate of Rs 20,516 crore and a revised estimate of Rs 21,742 crore.

Of this, the largest share — Rs 2,288 crore — has been allocated to Bhutan as development aid, followed by Rs 800 crore to Nepal and Rs 550 crore each to Mauritius and Maldives.

For the next fiscal, the allocation for Bangladesh has been pegged at Rs 60 crore, down from Rs 120 crore in 2025-26.

Unlike the last few years, no allocation has been made for the Chabahar port project in Iran. In the budget last year, an amount of Rs 100 crore was set aside for the port project in Iran. The amount rose to Rs 400 crore in the revised estimate.

India has been making an annual outlay of Rs 100 crore to the mega connectivity project in the Sistan-Balochistan province on Iran’s southern coast in the last several years.

In September last year, the US imposed economic sanctions on Iran. it had however granted a six-month exemption to India from the punitive measures on the Chabahar port project.

The waiver will come to an end on April 26.

Stay updated with the latest - Click here to follow us on Instagram