India's Strategic Pivot: Major Grant Increase to Bangladesh Amid Chabahar Port Funding Cessation

In a significant recalibration of its regional foreign policy and economic strategy, India has announced a substantial 74% increase in grants to Bangladesh for the fiscal year 2027, allocating ₹60 crore compared to the revised ₹34.48 crore for FY26. This move underscores New Delhi's intensified commitment to strengthening bilateral ties with Dhaka, reflecting broader geopolitical priorities in South Asia. Concurrently, the cessation of funding for the Chabahar port project marks a notable strategic shift, widely interpreted as a response to sustained diplomatic pressure from the United States. The decision to scrap Chabahar port investment suggests a realignment of India's connectivity and trade ambitions, potentially prioritizing alternative corridors and partnerships. This dual-track approach—bolstering support for a key neighbor while adjusting a flagship infrastructure initiative—highlights the complex balancing act India faces amid evolving global alliances and regional dynamics. The enhanced grants to Bangladesh are poised to deepen cooperation in areas such as development, security, and cross-border connectivity, reinforcing India's role as a principal regional actor. Analysts will closely monitor the implications of these budgetary adjustments on India's strategic autonomy and its broader economic and diplomatic footprint in the Indo-Pacific region.