Union Budget 2025: External Affairs Ministry gets Rs 20,516 crore, emphasis on ‘Neighbourhood First’ policy

Sources said that at this stage, no allocation has been made towards EXIM bank provisioning in MEA’s budget but may be done at a later phase if the need arises. This allocation of Rs 20,516.61 crore is an increase of 15.45 % in comparison to last year’s budget without the allocation towards EXIM bank provisioning, sources said.

The MEA budget has placed an emphasis on India’s ‘Neighbourhood First’ policy. Rs 4,320 crore — 64 per cent of the total scheme portfolio — has been earmarked for the country’s immediate neighbours for initiatives like large infrastructure projects such as hydroelectric plants, power transmission lines, housing, roads, bridges and integrated check-posts.

Bhutan continues to be India’s largest foreign aid recipient, receiving Rs 2,150 crore in 2025-26, which is an increase from last year’s budget estimate of Rs 2,068 crore. Although, this is a decrease from last year’s revised estimate of Rs 2,543 crore. India’s allocation for the Maldives has increased from Rs 400 crore (budget estimate) and Rs 470 crore (revised estimate) to Rs 600 crore. Afghanistan has seen its aid allocation decrease from last year’s budget estimate of Rs 200 crore to Rs 100 crore. But, it is an increase from Rs 50 crore of revised estimates. Afghanistan has been allocated an aid of Rs 100 crore, which is a decrease from last year’s budget estimate of Rs 200 crore but an increase from Rs 50 crore of revised estimate.

Myanmar’s allocation increased from Rs 250 crore in the 2024-25 budget to Rs 350 crore for 2025-26. However, the aid has decreased from last year’s revised estimate of Rs 400 crore.

India has maintained its allocation for Nepal at Rs 700 crore. Meanwhile, Sri Lanka saw an increase in its aid allocation at Rs 300 crore from last year’s budget estimate of Rs 245 crore.

Aid to Bangladesh remains unchanged at Rs 120 crore while aid to African nations rose to Rs 225 crore from last year’s Rs 200 crore.

Latin America’s allocation has been reduced from last year’s Rs 90 crore to Rs 60 crore. However, the initial budget estimate was Rs 30 cr. The allocation for Chabahar Port in Iran remains at Rs 100 crore.