New Delhi, Feb. 2 -- India slashed its budgetary allocation for developing Iran's Chabahar port in the budget for 2026-27 to zero in the face of US sanctions and 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 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 crore accounted for almost a third of the ministry's budget, and marked a slight increase over the last year's allocation of Rs.6,750 crore. The allocation for Chabahar port, which was revised from Rs.100 crore to Rs.400 crore for 2025-26, was cut to nil for 2026-27. A six-month exemption from US sanctions applicable to Chabahar port granted by the Trump administration in 2025 is valid only till April and the government has taken steps to reduce the exposure of state-run entities and officials to the sanctions. The Indian side has delivered on its commitment to provide $120 million to develop the port under a 10-year agreement signed with Iran in 2024 for long-term operations at Shahid Beheshti terminal. Officials serving on the board of India Ports Global Limited, the state-owned entity that handled operations at Shahid Beheshti terminal since 2018, have resigned. External affairs ministry spokesperson Randhir Jaiswal said last month that India remains engaged with the US to work out the arrangement for Chabahar port. In the case of Bangladesh, the development partnership outlay was cut from Rs.120 crore for 2025-26 to Rs.60 crore in 2026-27. India-Bangladesh ties have witnessed a downward spiral under the interim government in Dhaka led by Muhammad Yunus, with New Delhi looking to reset the relations following Bangladesh's general election on February 12. In keeping with the government's "Neighbourhood First" policy, Bhutan was allocated Rs.2,289 crore, about a third of the total external aid outlay, including soft loans and grants, for foreign countries, cultural and heritage projects and support for international training programmes. In 2024, India had doubled its financial support for Bhutan's five-year plans from Rs.5,000 crore to Rs.10,000 crore. The allocations for other foreign countries for 2026-27 included Rs.800 crore for Nepal, Rs.550 crore for the Maldives, Rs.550 crore for Mauritius, Rs.300 crore for Myanmar, Rs.400 crore for Sri Lanka, Rs.225 crore for African nations, Rs.150 crore for Afghanistan, Rs.120 crore for Latin American countries, and Rs.80 crore for other developing countries. The allocation for Mongolia jumped from Rs.5 crore in 2025-26 to Rs.25 crore for 2026-27. The outlays for Afghanistan, Mauritius, Nepal, Sri Lanka and the African countries increased, while those for the Maldives and Myanmar were reduced. Most of these allocations are for development schemes, ranging from large infrastructure projects, such as power plants, power transmission lines, housing, roads, bridges, and small-scale grassroots community development projects. With the external affairs ministry operationalising more new missions and posts abroad, the outlay on this count was increased to Rs.5,059 crore for 2026-27, against Rs.4,206 crore for 2025-26. The outlay for citizen-centric initiatives, including issuance of passports and implementation of the Passport Seva Project, was increased from Rs.1,913 crore in 2025-2026 to Rs.2.435 for 2026-27. The external affairs ministry's total outlay includes expenses passport and emigration, external aid for countries and projects abroad, and contributions to bodies such as the Indian Council of Cultural Relations (ICCR) and the South Asian University....