India, Feb. 1 -- India has slashed its allocation for developing Iran's Chabahar port in the budget for 2026-27 to zero in the face of US sanctions, while the outlay for development projects in Bangladesh was halved to Rs.60 crore, reflecting the current strains in ties between the two sides.

Bhutan, a close development partner, again garnered the largest share of the Indian government's external aid portfolio, with an outlay of Rs.2,288 crore, according to budget documents. This was marginally higher than the allocation of Rs.2,150 crore in the budget for 2025-26.

The external affairs ministry was allocated Rs.22,119 crore, slightly higher than its outlay of Rs.20,517 crore in 2025-26. The overseas development portfolio of Rs.6,998 cro...