India has halved its budgetary allocation for Bangladesh in the Union Budget 2026-27, slashing funds from ₹120 crore to ₹60 crore. This sharp reduction reflects mounting diplomatic tensions between New Delhi and Dhaka.

The cut comes against the backdrop of escalating friction over violence targeting minorities, especially the Hindu community, in Bangladesh. Reports of attacks on homes, properties, businesses, and places of worship have intensified since the ouster of former Prime Minister Sheikh Hasina in 2024.

India's Ministry of External Affairs has informed the Rajya Sabha that it continues to monitor these incidents closely. Minister of State Kirti Vardhan Singh stated that New Delhi has repeatedly raised concerns about minority safety with Bangladeshi authorities at political and diplomatic levels.

Prime Minister Narendra Modi personally addressed the issue during his meeting with Bangladesh's Chief Adviser Muhammad Yunus on 4 April 2025. The ministry has criticised Dhaka's interim government for dismissing such attacks as mere personal rivalries or political disputes.

This rhetoric, according to the ministry, only emboldens extremists and perpetrators while heightening fear among minorities. Meanwhile, Bangladesh under Yunus has pivoted towards closer ties with Pakistan, a move that alarms India given the historical context of the 1971 liberation war.

In 2024, Yunus met Pakistan's Prime Minister Shehbaz Sharif on the sidelines of a conference in Egypt. He expressed a desire to resolve lingering grievances from Dhaka's bloody separation from Islamabad, prompting Sharif to describe the exchange as warm and cordial.

Building on this, Bangladesh and Pakistan have introduced visa-free travel for holders of diplomatic and official passports. They have also committed to reviving the Joint Economic Commission—last held in 2005—and establishing a new Trade and Investment Commission.

Cargo ships now ply direct routes between the two nations, with direct flights on the horizon. Pakistani carriers Fly Jinnah and Air Sial have received clearance to operate services, and a flight from Dhaka landed at Karachi's Jinnah International Airport on Thursday, marking the first non-stop connection in 14 years.

These developments signal a rapid warming of Dhaka-Islamabad relations, straining India's position. India-Bangladesh ties have deteriorated steadily since Hasina's fall, with minority violence and foreign policy shifts at the core.

In a related budgetary move, India has omitted any allocation for the Chabahar port project. This marks a departure from previous years, amid fresh US economic sanctions on Iran.

India plays a key role in developing the strategically vital Chabahar port. Last September, Washington imposed sanctions on Tehran but granted New Delhi a six-month exemption, set to expire on 26 April.

By contrast, Bhutan tops the list of aid recipients with ₹2,289 crore, up from ₹2,150 crore last year. Finance Minister Nirmala Sitharaman presented her ninth Union Budget on Sunday, emphasising manufacturing growth and job creation.

Based On NDTV Report