Centre Alters Foreign Aid Policy for BJP-led Maharashtra, Denied Same for Kerala in 2018

New Delhi: The Central Government has permitted a foreign aid request by the BJP-ruled Maharashtra government, marking a reversal of its earlier policy that blocked similar assistance for Kerala during the devastating 2018 floods.
In 2018, following Kerala’s appeal to accept financial aid from foreign governments after suffering over Rs 50,000 crore in damages, the Ministry of External Affairs had firmly denied permission. The ministry had then stated that India had the internal capacity to meet relief and rehabilitation needs, and that the government was committed to addressing such crises through domestic resources alone.
That policy has now been selectively relaxed. The Devendra Fadnavis-led Maharashtra government, grappling with a severe fiscal crisis, had sought central approval to receive foreign financial assistance. Unlike the firm rejection shown to Kerala, the Centre granted permission to Maharashtra, drawing attention to apparent policy inconsistency.
Despite the unprecedented scale of the 2018 Kerala floods, the Centre refused to make exceptions—even on humanitarian grounds. The refusal had triggered criticism from opposition parties and civil society, as the state faced resource constraints during large-scale recovery operations.
The current shift isn’t the first deviation from the stated foreign aid policy. In 2020, during the COVID-19 crisis, the central government amended the rules under the Foreign Contribution Regulation Act (FCRA) to allow foreign donations to the Prime Minister’s disaster relief initiative, PM CARES Fund. That year, the fund received Rs 494 crore in overseas contributions. Donations from abroad have continued in subsequent years.
The original policy to decline foreign disaster assistance was first articulated in 2004 during the UPA government under Prime Minister Manmohan Singh, following the Indian Ocean tsunami. At the time, Manmohan Singh clarified that while foreign aid was not required, it could be considered if needed. Kerala’s appeals in 2018, however, were not considered under this discretionary clause.