India's grant assistance to the Maldives is expected to decrease in the coming fiscal year, according to the proposed budget.

The proposed budget for 2026-2027 has been presented to the Indian parliament. The country runs its fiscal year from April to March.

The proposed budget includes Rs 560 crore (USD 62 million) in free aid to the Maldives. But the amount budgeted last year was Rs 600 crore.

However, the current budget shows that the country gave Rs 625 crore (USD 69 million) to the Maldives in the current fiscal.

India is carrying out mega projects in the Maldives, including the Thila-Male' Bridge project with USD 100 million grant.

Other projects are being implemented with loans from the Exim Bank of India.

The previous administration under former President Ibrahim Mohamed Solih maintained very close relations with India and adopted the “India First” policy.

However, the government began to re-establish relations with India as Sri Lanka's financial situation deteriorated sharply and foreign investment did not come as expected.

But incumbent President Mohamed Muizzu came to power with the "India Out" campaign.

In January 2024, after returning from a visit to China, Muizzu announced a roadmap for moving away from India. These include ending dependence on India for imports of food and medicines.

Since then, relations between the Maldives and India have deteriorated significantly. However, the government was forced to re-establish relations with India due to a lack of assistance from China and a slowdown in the economy.