MEA’s Budget and Global Ambitions
The Ministry of External Affairs (MEA) budget saw a rare 23% increase in 2023, but it still remains one of the least-funded ministries, receiving just 0.4% of India’s overall expenditure.
Despite this, the MEA is key to India's global leadership ambitions, such as strengthening ties with the Global South, ASEAN, the Quad, and promoting initiatives like the International Solar Alliance.
Challenges and Required Resources
Countries expect more from India in terms of timely project delivery and diplomatic support, but the current MEA budget is insufficient.
The Parliamentary Standing Committee recommended increasing MEA’s share to 1% of the overall budget, but even a gradual increase to 0.6% or 0.8% would show intent to boost diplomatic capacity.
Two key areas needing more funding: economic tools for regional cooperation and enhancing the MEA’s institutional capacity, including human resources and research.
Foreign Aid and Financial Shifts
India’s foreign aid decreased by 10% in 2024-25, while loans to foreign governments increased by 29%.
Much of the foreign aid goes to India’s neighbors, with Bhutan being the largest recipient, while aid to Bangladesh declined and Sri Lanka’s allocation increased by 63%.
There is a shift from grants to lines of credit (LoCs), especially in the neighborhood, requiring more oversight and stretching diplomatic resources.
Institutional Capacity and Research Needs
The MEA's training budget increased by 30%, but the Indian Foreign Service (IFS) remains understaffed, and capacity-building remains insufficient.
Cuts to institutions like Nalanda University and South Asian University contrast with MEA’s growing investments in international conferences and dialogues.
More resources are needed for policy-relevant research and the digitization and declassification of historical diplomatic records
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