India Proposes Rs. 4 Billion Aid for Sri Lanka in 2026 Budget

The Government of India has proposed an allocation of Rs. 4 billion in financial assistance to Sri Lanka under its 2026 national budget, reaffirming India’s continued support for Sri Lanka’s economic stability and development.

Presenting the budget on Sunday, February 1, Indian Finance Minister Nirmala Sitharaman outlined the government’s priorities for the coming fiscal year, with a strong focus on strengthening the manufacturing sector amid ongoing global economic uncertainties.

The 2026 Budget emphasizes structural reforms, the creation of a resilient financial system, and increased investment in advanced technologies, including artificial intelligence (AI), as key drivers of economic growth.

The Modi administration continues to face the challenge of expanding manufacturing’s share of the economy from its current level of less than 20 percent of GDP to a targeted 25 percent. This expansion is viewed as crucial for generating employment opportunities for the millions of young people entering India’s workforce each year.

The proposed aid allocation for Sri Lanka reflects India’s broader regional engagement strategy and its commitment to supporting neighboring countries during periods of economic recovery and transformation.