Strategic Shift: Bangladesh Aid Slashed 50%, Chabahar Excluded in India's FY27 Budget Allocation

India's FY2026-27 budget reveals a significant recalibration of external assistance priorities, with aid to Bangladesh halved and no allocation for the strategic Chabahar port project. This development signals a potential reassessment of regional partnerships amid evolving geopolitical dynamics. Analysis indicates a continued emphasis on Bhutan, which retains its position as the primary recipient with a substantial ₹2,288 crore allocation, reinforcing the special bilateral relationship. The absence of Chabahar funding warrants attention, given the port's role in India's connectivity strategy and regional trade corridors. The reduced Bangladesh allocation may reflect shifting diplomatic or economic considerations, possibly linked to bilateral developments or internal budgetary constraints. This budgetary pattern suggests a more selective approach to external engagements, prioritizing established partnerships while potentially deprioritizing certain strategic initiatives. The intelligence community will monitor subsequent diplomatic exchanges and implementation patterns to assess whether this represents a temporary adjustment or a sustained policy reorientation with implications for regional influence and economic diplomacy.