Dhaka says it is ‘shocked’ the ousted leader was allowed to speak at a news conference, her first since the 2024 ouster.

India slashes aid to Bangladesh by half amid diplomatic tensions - New Delhi cuts Dhaka funding amid strained ties, while Bhutan remains top aid recipient

The two countries have stepped up ties since the removal of former Prime Minister Sheikh Hasina from power in 2024

NEW DELHI, Jan 21 (Reuters) - India will withdraw its diplomats' families and dependents from Bangladesh in the face of security threats as tension rises ahead of a February 12 general election, an Indian official said on Wednesday.

India has significantly reduced its allocation for Bangladesh in the Union Budget 2026-27. The government has allocated Rs 60 crore to the neighbouring country, a 50 per cent drop from the Rs 120 crore allocated in the previous fiscal year.

For New Delhi, the deal is a strategic breakthrough that aligns trade with geopolitics. For Islamabad and Dhaka, it threatens to dismantle decades of hard-won advantage built on special trade regimes rather than competitiveness.

India has halved its financial assistance to Bangladesh in the Union Budget 2026-27, a move that comes against the backdrop of strained bilateral ties, rising attacks on minorities in Bangladesh.

Recent violent incidents in Bangladesh have drawn international attention due to their scale and intensity. India, as a neighboring country, expressed deep concern and called for immediate restoration of peace and protection of citizens.