Yet the strategic costs are real. Reduced engagement in Bangladesh risks ceding influence at a moment when Dhaka is actively diversifying its partnerships. Hesitation over Chabahar weakens India’s leverage in Iran and Central Asia and underscores its vulnerability to US pressure even as it seeks a more multipolar foreign policy. The 2026–27 Budget does not signal a dramatic shift in Indian foreign policy. There is no abandonment of neighbours-first rhetoric or of connectivity-led diplomacy. What it reveals instead is a narrowing circle of feasible economic action.
