New Delhi: The government has not allocated any funds for the Chabahar port in Iran in the 2026-27 budget estimates released Sunday (February 1), breaking from a pattern of budgetary provisions that began in 2016-17 for the strategic maritime gateway to Afghanistan and Central Asia.The Ministry of External Affairs (MEA)’s budget documents show no provision under the Chabahar Port line item for 2026-27, a sharp contrast to the Rs 400 crore allocation in the revised estimates for 2025-26.Official sources said the absence of allocation reflects India’s completion of its financial commitment to the project rather than any withdrawal from the port. India has transferred the full committed amount of $120 million to Iran, with the last tranche sent in August 2025, sources told The Wire.India’s budgetary engagement with Chabahar has seen a fluctuating pattern over the past decade. The first allocation appeared in 2016-17, with revised estimates of Rs 100 crore and actual spending of Rs 100 crore that year.In 2017-18, the budget estimate was raised to Rs 150 crore, but revised estimates dropped to just Rs 0.1 crore, indicating virtually no spending. The 2018-19 budget maintained the Rs 150 crore allocation, which was reduced to Rs 45 crore in 2019-20 and Rs 100 crore in 2020-21. None of these three years saw any actual expenditure.Regular spending resumed from 2021-22, with India spending Rs 100 crore annually through 2023-24, matching both the budget and revised estimates.The spending pattern changed dramatically in 2024-25. While the budget estimate remained at Rs 100 crore and revised estimates stayed unchanged, actual expenditure quadrupled to Rs 400 crore. For 2025-26, the budget estimate was Rs 100 crore, but the revised estimate jumped to Rs 400 crore, signalling accelerated spending to complete the committed investment.Over this period, India invested in developing two terminals and related infrastructure at the port on Iran’s southeastern coast. The port is critical for India’s connectivity to Afghanistan and Central Asia while bypassing Pakistan.Sources said the absence of a fresh allocation should not be read as a signal that India is stepping away from Chabahar, noting that funds can be sought through interim provisions later in the financial year if required.They added that with India Ports Global Limited (IPGL) having met its investment commitments at the port, budgetary support is now limited to staff salaries and routine administrative costs. “The actual port operations are self-sustaining from the revenue being earned.”IPGL is the special purpose vehicle created to operate and develop the port.The decision comes as uncertainty looms over the future of US sanctions waivers for Chabahar. India currently operates under a conditional six-month waiver valid until April 26, 2026. The United States revoked a long-standing blanket waiver in September 2025, exposing Indian operators to potential penalties.Sources said that there was “no clarity” about whether Washington will extend the waiver beyond April.The Trump administration’s warning on January 12 to impose an additional 25% tariff on any country doing business with Iran has added further pressure. This comes when India is already dealing with 50% US tariffs on many of its exports and is negotiating with Washington for tariff reductions and a broader trade deal.Despite these pressures, India’s actions suggest it wants to maintain its Iran relationship. Last month, India voted against a UN Human Rights Council resolution condemning Iran’s crackdown on peaceful protests. The resolution was adopted by 25 votes in favour and seven against, with India joining China, Indonesia and Pakistan in opposing it.Sources had told The Wire that India’s vote was driven partly by its traditional discomfort with country-specific resolutions at the UNHRC, but acknowledged that India also needs Iran’s goodwill to maintain its interests in Chabahar.Iran’s Ambassador to India, Mohammad Fathali, publicly thanked the Indian government on social media following the vote. “I extend my sincere gratitude to the Govt. of India for its principled and firm support of I.R. of Iran at the UN_HRC,” he wrote, calling the stance a reflection of “India’s commitment to justice, multilateralism, and national sovereignty.”The zero allocation for Chabahar in 2026-27 thus reflects a transition rather than an exit. Having fulfilled its capital investment commitments, India now appears to be letting the port’s commercial operations fund themselves, while maintaining its broader strategic and diplomatic engagement with Iran through other means.MEA budget sees modest increaseThe zero allocation for Chabahar is part of a wider MEA budget for 2026-27 that shows a modest 7.81% increase over the previous year, rising to Rs 22,118.97 crore from Rs 20,516.61 crore in 2025-26.The actual picture of MEA’s budget trajectory reveals significant distortions caused by Exim Bank provisioning that began in 2023-24. That year, the budget estimate was Rs 18,050 crore, but revised estimates ballooned to Rs 29,121.88 crore and actual expenditure reached Rs 28,914.51 crore.The pattern continued in 2024-25, when budget estimates of Rs 22,154.67 crore were revised to Rs 25,277.20 crore, with actual spending of Rs 25,512.37 crore. The extra allocation in both years was primarily driven by Rs 4,383.40 crore allocated for payments to Exim Bank under the Guarantee Redemption Fund in 2024-25.This provision covers guarantees invoked against Lines of Credit extended to foreign countries that failed to repay loans on time. The parliamentary standing committee on external affairs flagged this issue in its December 2025 report, complaining that including such provisioning “distorts the correct picture of actual allocation to the MEA” since the funds are non-productive and do not contribute to foreign policy objectives.Following the committee’s criticism, the government has eliminated this line item. The 2025-26 and 2026-27 budgets show only Rs 0.01 crore, a token allocation, under “Payment to Exim Bank towards Guarantees invoked against Doubtful Debts.”Stripping out the Exim Bank provisioning from 2024-25 actual expenditure gives a productive budget of Rs 21,128.97 crore. Against this baseline, the 2026-27 allocation represents a 4.69 percent increase, while it is 1.73 percent higher than the 2025-26 revised estimates.Foreign aid reflects shifting bilateral tiesThe foreign aid allocations for 2026-27 offer a window into India’s changing relationships across its neighbourhood and beyond.Afghanistan has seen the sharpest increase in percentage terms, with its allocation jumping 50% from Rs 100 crore to Rs 150 crore. The increase reflects India’s deepening engagement with the Taliban administration despite not formally recognising the government in Kabul.Taliban foreign minister Amir Khan Muttaqi visited India in October 2025, marking the first visit by a Taliban foreign minister. This was followed by more ministerial visits, and Afghanistan’s Charge d’Affaires from the Taliban-run Ministry of Foreign Affairs has also been stationed in New Delhi, signalling that political outreach has become full-fledged. The warming ties come as Afghanistan’s relations with Pakistan have deteriorated sharply.In contrast, Bangladesh has seen its allocation halved from Rs 120 crore to Rs 60 crore, reflecting strained ties following the ouster of prime minister Sheikh Hasina in August 2024.Sri Lanka saw its allocation increase 33% from Rs 300 crore to Rs 400 crore, reflecting India’s continued engagement with the island nation under President Anura Kumara Dissanayake’s government, which took office in September 2024.On the northern frontier, Nepal’s allocation rose from Rs 700 crore to Rs 800 crore, while Bhutan, India’s largest aid recipient, saw its allocation increase from Rs 2,150 crore to Rs 2,288.56 crore, maintaining India’s position as Bhutan’s principal development partner.The budget figures show a steady decline in India’s spending on Bangladesh. In 2023-24, when Hasina was still in power, India had budgeted Rs 200 crore and spent Rs 157.63 crore. The 2024-25 budget estimate was Rs 120 crore, but actual spending dropped to just Rs 59.15 crore. For 2025-26, while the budget estimate remained at Rs 120 crore, revised estimates have been slashed to Rs 34.48 crore, indicating minimal spending during the year. The 2026-27 allocation of Rs 60 crore formalises this downward trajectory.The other slight drop has been in the Maldives and Myanmar, though India’s relations with both these neighbours has remained steady. The Maldives saw a reduction from Rs 600 crore to Rs 550 crore. Myanmar’s allocation dropped from Rs 350 crore to Rs 300 crore as the country continues to grapple with instability following the 2021 military coup.