Minister of Corporate Affairs of India Nirmala Sitharaman has allocated 6,000 million India Rupees (INR) as development aid to the Maldives in the 2025 Union Budget proposal.

Indian media notes that this is the largest increase in percentage terms among South Asian countries in the budget allocation for neighboring countries.

On the other hand, this is a significant increase compared to the 4,700 million rupees allocated for the 2024-25 fiscal year.

After reducing aid due to strained relations between the two countries in 2024, the newly allocated aid represents an increase of approximately 28 percent compared to the previous year.

The aid was reduced following diplomatic tensions that arose after some senior officials in the Muizzu government made disrespectful comments about the Prime Minister in connection with Prime Minister Narendra Modi's visit to Malé in January 2024.

According to Indian media, the budget increase comes at a time when high-level meetings are being held between the two countries, and Dr. Muizzu's government is working to recognize India's importance.

In this regard, Indian media has also reported that efforts are underway to re-establish military cooperation between the two countries, following the withdrawal of Indian troops from the Maldives earlier in 2024 and the visit of Maldivian Defense Minister Ghassan Maumoon to India in early December.

The Maldivian president who campaigned on an "India Out" platform, highlighted India as an "important partner" during bilateral discussions with Prime Minister Modi on his visit to India in October 2024.

Looking at other countries in the region, India has allocated the largest aid to Bhutan for 2025. 21,500 million rupees have been allocated for Bhutan in 2025. This is an increase from the 20,680 million rupees allocated last year. India is Bhutan's most important development partner.

It is noted that India's 2025 budget has reduced the amount of aid to Afghanistan compared to last year. India has limited its dealings with the Taliban government to humanitarian aid and economic cooperation only.

The annual budget has maintained India's aid allocation to Nepal at 7,000 million rupees.

The amount allocated to Sri Lanka has been increased from 2,450 million rupees to 3,000 million rupees.

Despite the diplomatic tensions that arose following the overthrow of former Prime Minister Sheikh Hasina in Bangladesh last year, the aid amount to Bangladesh has been maintained at 1,200 million rupees without change. While Sheikh Hasina has been given political asylum in India, the government under Mohammed Yunus continues to pressure India for her return.

Note: (1 USD = 86.5650 Indian Rupees)