ISSN (Online) - 2349-8846 How India Funds the World: Financial Assistance in the Immediate Neighbourhood ANGSHUMAN CHOUDHURY ASHUTOSH NAGDA Angshuman Choudhury (angshuman.ch93@gmail.com) is a senior Researcher and coordinator, Southeast Asia Research Programme, Institute of Peace and Conflict Studies. Ashutosh Nagda (ashutosh.nagda@ipcs.org) is a researcher, Southeast Asia Research Programme, Institute of Peace and Conflict Studies. Vol. 54, Issue No. 22, 01 Jun, 2019 In the schema of realist international politics, where political relationships between aspiring powers are often decided by economic underpinnings, financial aid is often a key instrument of foreign policy. In most cases, it serves as a long-term insurance to preserve old relationships, while in others, it acts as a direct incentive to forge new partnerships. Using figures from the "Expenditure Profiles" in the union budgets of the past five fiscal years, this article is the first in a two–part series that provides an assessment of India's budgetary aid programme to countries in India's geographic neighbourhood. India has traditionally extended financial assistance to countries in its immediate neighbourhood in order to maintain geopolitical clout and to keep crucial economic partnerships up and running. This long-standing policy is gradually becoming a centrepiece of Indian foreign policy as the hegemony of the global North 1 gives way to a new geopolitical reality wherein regional powers in the global South 2 steadily gain international influence through new horizontal partnerships and investments. India’s broadening foreign aid spectrum must be seen in this dynamic context of rapidly expanding South–South