01 Feb 2026 - 22:49
The Kabul Tribune (KT) — India’s latest federal budget makes no allocation for the strategic Chabahar Port project in Iran, The Statesman reported, linking the move to rising tensions between the United States and Iran.
According to the report, Finance Minister Nirmala Sitharaman did not set aside any funds for the port in the current budget, despite previous allocations. The project is considered vital for providing India with direct access to Afghanistan and Central Asia while bypassing Pakistan.
In the 2024-25 budget, India allocated 400 crore rupees ($approximately 48 million) for the project, while 100 crore rupees were earmarked in the 2025-26 budget. Revised estimates for 2025-26 later increased the allocation back to 400 crore rupees. However, no funds have been assigned this time amid growing geopolitical uncertainty.
The report said the decision comes as Washington tightens sanctions on Iran. In September last year, the United States imposed fresh sanctions but granted India a six-month waiver for the Chabahar project, citing its role in delivering humanitarian aid to Afghanistan. That waiver is set to expire on April 26, 2026, and India is reportedly in discussions with U.S. officials.
The Trump administration has also announced plans to impose 25% tariffs on countries engaged in trade with Iran, further complicating the situation for New Delhi. In 2024, India signed a 10-year agreement to operate the Shahid Beheshti Terminal at Chabahar, underscoring the port’s strategic importance.
Separately, The Statesman reported that India has halved its financial assistance to Bangladesh amid strained bilateral relations. Aid to Bangladesh under the “Aid to Countries” category was reduced from 120 crore rupees in the 2025-26 budget to 60 crore rupees, with revised estimates lowering it further to 34.48 crore rupees.
Overall, India increased its total allocation under the “Aid to Countries” category to 5,686 crore rupees, about 4% higher than last year’s revised estimate of 5,483 crore rupees.
Bhutan remains the largest beneficiary, receiving 2,288.56 crore rupees, up from 1,950 crore rupees in the revised 2025-26 budget, reflecting strong political and economic ties between the two countries.
Funding for Afghanistan has also increased, rising from 100 crore rupees in the revised 2025-26 budget to 150 crore rupees, as India seeks to safeguard its regional interests.
