India’s expenditure on foreign aid and grants, is down sharply since FY20, according to data from the Ministry of External Affairs. While foreign grants and loans disbursed stood at ₹7,023.14 crore in FY20, it declined to ₹4,775.99 crore in FY24, registering a decline of 32 per cent.

The data for FY24, is however provisional. India spent ₹4,703.49 crore in FY23, as grant and loan disbursement to foreign countries. The sum disbursed on this head was the highest in FY16, when a whopping ₹7,719.65 crore was spent, to help out other countries. In the subsequent fiscal, it came down quite a bit to ₹4,747.39 crore in FY18. While, it went up in the next few financial years, it started plummeting since the pandemic, reaching an 11-year-low in FY23.

Experts say, that this could be because India has been moving away from providing grants, to a credit line model. For instance, a few days back, India signed a long-term bilateral contract on Chabahar port with Iran, which comprised a direct investment of $120 million from India, for infrastructure development and a $250 million line of credit to Iran.

Bhutan and Maldives, receive big

Budget documents show that India has been providing aid, grants and loans, primarily to ten countries. It also has provisions to help other developing countries, Eurasian countries, African countries and Latin American countries.

In the last ten years, a lion’s share of the total money disbursed, was given to Bhutan. In FY19, 49 per cent of the funds went to Bhutan. The two countries, historically, share a strong bilateral relationship, making Bhutan a protected state of India. This has been the case since Independence. Bhutan, was the first country that Narendra Modi visited, after taking oath as India’s Prime Minister in 2014. At that time, he inaugurated the Supreme Court Complex in Bhutan and also promised help to Bhutan in the IT and digital sectors. Earlier this year, the King of Bhutan, conferred Modi with Bhutan’s highest civilian award. It was the first such award to a non-Bhutanese person.

Despite the current political row, in FY24, Maldives received 17.9 per cent of India’s grant money. In FY24, India budgeted an allocation of ₹400 crore of grants to the island nation in the ongoing fiscal year. This was around 1.5 per cent of Maldives’ budget for FY24. In FY23, Maldives’ share was just 3.9 per cent.

Another big recipient is Nepal, where 13.2 per cent of the funds were disbursed. Provisional data shows no disbursement to Afghanistan or Mauritius in FY24. Historically, these countries received a good share of India’s foreign aid. However, this could be because grants are disbursed based on needs.

While answering a question in the Lok Sabha in December, 2023, Minister of External Affairs, S Jaishankar said, that India still provides humanitarian assistance to Afghanistan, even after the Taliban takeover. “We have supplied several shipments of humanitarian assistance consisting of 50,000 MTs of wheat, 250 tonnes of medical aid and 28 tonnes of earthquake relief aid. These consignments were handed over to the United Nations World Food Programme (UNWFP), United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA), Indira Gandhi Institute of Child Health (IGICH) and Afghan Red Crescent Society (ARCS),” he said, adding India has also been providing medical aid and baby food to the country.