India has once again earmarked USD 69 million in financial assistance for the Maldives, maintaining the same level of support as the previous fiscal year. The allocation was confirmed in India’s 2026–2027 national budget, presented this week, which outlines foreign aid commitments to partner countries.
Aid Level Remains Unchanged from Last Year
The USD 69 million set aside for the Maldives matches the amount allocated in India’s 2025–2026 budget, signaling continuity in New Delhi’s financial support to the island nation. Despite shifts in regional dynamics and domestic priorities, India has opted to keep its assistance to the Maldives steady for another year.
India’s Ministry of External Affairs has been allocated a total foreign aid budget of approximately USD 25 billion for the upcoming fiscal year, covering assistance to countries across South Asia, Africa, and beyond.
Bhutan Leads South Asian Aid Recipients
Among South Asian nations, Bhutan continues to receive the largest share of Indian aid. Nepal ranked second, with an allocation of USD 87 million for the 2026–2027 period.
The Maldives shares the USD 69 million allocation level with Mauritius, placing both countries among the higher recipients of Indian assistance in the region. The funding typically supports development projects, infrastructure, capacity building, and economic cooperation, though specific project details were not outlined in the budget announcement.
Bangladesh Sees Sharp Reduction in Funding
In contrast, India’s aid to Bangladesh has been significantly reduced. The allocation for Bangladesh has been cut by half compared to the previous year, with USD 6.5 million designated for the 2026–2027 fiscal period.
The reduction marks one of the most notable changes in India’s regional aid distribution this year and reflects a broader reshuffling of priorities within its foreign assistance framework.
Strengthening Ties After a Period of Strain
India–Maldives relations experienced a period of strain following the election of President Dr. Mohamed Muizzu. However, diplomatic ties have shown visible improvement over the past year, driven by high-level engagements and renewed dialogue.
President Muizzu has made two official visits to India since taking office, moves that were widely seen as efforts to stabilize and strengthen bilateral relations. Adding to this momentum, Indian Prime Minister Narendra Modi visited the Maldives as the guest of honor during last year’s Independence Day celebrations.
These exchanges appear to have contributed to a gradual warming of ties, reflected in India’s decision to maintain its aid commitment to the Maldives.
