India's financial assistance lowest in 12 years during interim government

India has provided Bangladesh with approximately 15.57 billion rupees in financial assistance over the past 12 years.

However, the amount has dropped to its lowest level in more than a decade during the tenure of the interim government led by Professor Muhammad Yunus.

Just five years ago, India was providing over 2 billion rupees annually. Under the interim government, that figure dropped to 250 million rupees—the lowest in the past 12 years.

The information was disclosed by India’s Minister of State for External Affairs Kirti Vardhan Singh in response to a question during a session of the Lok Sabha last Friday. The data on financial assistance reflects this decline.

Lok Sabha member TR Baalu had asked how much assistance Bangladesh had received since the 2014–15 fiscal year.

In a written reply, Kirti Vardhan Singh provided the details.

A press release from India’s Ministry of External Affairs also outlined the financial assistance provided to Bangladesh, excluding funds extended under Lines of Credit (LoC).

According to the statement, India’s approach toward Bangladesh is “neighbourhood-centric and people-oriented.”

India has supported various development initiatives through LoC and grants, as well as provided assistance in social development, humanitarian aid, disaster relief, and capacity-building programmes.

The Lok Sabha was given a breakdown of assistance from the 2014–15 fiscal year up to February of the current 2025–26 fiscal year (India’s fiscal year runs from April to March).

Over the past 12 years, India has provided a total of about 15.57 billion rupees. In 2014–15, around 1.98 billion rupees were given. The highest amount came in 2021–22, when India provided 2.1953 billion rupees.

Since then, assistance has declined. It dropped to 590 million rupees in the 2024–25 fiscal year—the year marked by a mass uprising that led to the fall of Sheikh Hasina’s government. She later took refuge in India. Following this, an interim government led by Professor Muhammad Yunus was formed. Tensions over various issues have since emerged between the two countries, contributing to a decline in bilateral financial assistance.

In the current 2025–26 fiscal year, up to February (11 months), only 250 million rupees has been disbursed. Over five years, Indian assistance has fallen to one-eighth of its previous level.

Kirti Vardhan Singh told the Lok Sabha that India and Bangladesh share deep historical, geographical, cultural, linguistic, and social ties as neighboUring countries.

India has consistently supported a democratic, stable, peaceful, progressive, and inclusive Bangladesh, and remains committed to continuing high-level exchanges and meetings under bilateral institutional frameworks.

He also noted that Bangladesh has not been given preferential treatment in using Indian ports for its own exports, and that any policy changes would be made after considering all relevant factors.

According to Bangladesh’s Economic Relations Division (ERD), India has disbursed a total of USD 2.1 billion under LoC arrangements up to January this year.

India had committed USD 7.36 billion in loans to Bangladesh under three LoC agreements signed in 2010, 2016, and 2017, but disbursement has not met expectations.

Most of the projects fall under infrastructure, power, and connectivity sectors. Under the first LoC in 2010, worth USD 1 billion, 15 projects were undertaken—12 have been completed and three are ongoing.

Under the second LoC, of 15 projects, two have been completed, 10 are ongoing, and three remain at the proposal stage. Under the third LoC, eight out of 13 projects are ongoing, while the remaining five are still at the proposal stage.

An ERD official said that disbursement of Indian loans slowed after the interim government took office. However, the new government has initiated a review to identify the obstacles affecting fund release under LoC-supported projects.