Context

• Every year, when the Union Budget is announced, discussions primarily revolve around taxation, infrastructure, and defence.
• However, the budget allocation for India’s Ministry of External Affairs (MEA) is equally significant, as it shapes the country’s foreign policy capabilities and global influence.
• Despite being one of the least-funded ministries, the MEA plays a crucial role in realising India’s global ambitions.
• While India is committed to expanding its diplomatic and strategic footprint, the financial resources allocated to the MEA often fall short of expectations.

India’s Vision for a ‘Viksit Bharat’ and the Role of Diplomacy

• India's vision of achieving a ‘Viksit Bharat’ (developed India) by 2047 is closely tied to developing and maintaining strong global partnerships.
• The government has articulated its ambition to emerge as a leader on the world stage, particularly in engaging with the Global South and strengthening ties with key regional actors like the Association of Southeast Asian Nations (ASEAN).
• Additionally, India has sought to enhance regional connectivity and play a more active role in multilateral groups such as the Quad (comprising India, Australia, Japan, and the United States).
• India’s creation of institutions like the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure are also central to its growing global influence.
• However, these aspirations necessitate a well-funded and well-equipped Ministry of External Affairs.

Shortcomings of MEA Budget

• Inadequate Funding for Expanding Diplomatic Initiatives
  • India’s foreign policy ambitions are broad, encompassing regional, bilateral, and multilateral engagements.
  • However, the financial resources allocated to the MEA are insufficient to match the scale of India’s diplomatic outreach.
  • Despite a 23% increase in the MEA’s budget in 2024-25, this bump still falls short of what is needed to effectively execute the country’s ambitious foreign policy goals.
  • Given the complex and dynamic nature of global diplomacy, the MEA is tasked with managing a broad range of activities, including international negotiations, participation in multilateral organisations, and fostering strategic partnerships with key global powers.
  • The current budget allocation simply does not provide the Ministry with enough financial flexibility to pursue these goals comprehensively.
• Understaffing and Overstretching of Resources
  • One of the most significant shortcomings of the MEA’s budget is its chronic understaffing.
  • The Indian Foreign Service (IFS), the backbone of India’s diplomatic corps, remains significantly understaffed.
  • Despite the vital role played by the IFS in shaping foreign policy and managing international relations, the Ministry has faced delays in expanding the diplomatic corps and lacks sufficient lateral entry mechanisms to bring in fresh expertise from outside the traditional diplomatic training.
  • The IFS's overburdened diplomats often find themselves stretched thin, leading to issues with the quality and timeliness of India’s diplomatic efforts.
• Limited Capacity for Regional Integration and Economic Diplomacy
  • Another area in which the MEA’s budget falls short is the financing of India’s economic diplomacy and regional integration efforts.
  • India’s regional connectivity initiatives, such as the ‘Neighbourhood First’ policy, are critical to maintaining stability and creating cooperation in South Asia.
  • However, these initiatives often require substantial financial backing to be effective.
  • As India faces growing competition from China, which has significantly ramped up its investment in South Asia, India needs to counterbalance this influence with stronger diplomatic, economic, and infrastructural support.
• Lack of Funding for Cultural Diplomacy and Soft Power Projection
  • India has made significant strides in using cultural diplomacy as a means of strengthening its global influence.
  • Initiatives such as the promotion of yoga, Indian art, and academic exchanges are key components of India’s ‘soft power.’
  • However, the MEA’s budget for cultural diplomacy and foreign missions has been relatively modest, with a mere 7% increase in the recent Budget.
  • Cultural diplomacy requires sustained investment to expand the reach and effectiveness of India’s soft power initiatives.
  • Without adequate funding, India risks losing out on the opportunity to strengthen its global image and cultural footprint.

Regional Connectivity Challenges and the Need for Financial Backing

• India’s regional connectivity is facing numerous challenges, particularly in South Asia.
• The political upheaval in Bangladesh, Myanmar’s instability, strained relations with Nepal, and the Maldives’ India Out’ campaign have all added layers of complexity to India’s foreign policy.
• However, recent high-level visits, including those by Sri Lanka’s President and Bhutan’s Prime Minister, have provided some hope for sustaining cross-border projects.
• The government’s ‘Neighbourhood First’ policy requires a robust economic support structure to continue pushing regional connectivity initiatives, particularly in the face of increasing Chinese influence in the region.
• While India’s financial aid to foreign countries declined by 10% in 2024-25, loans to foreign governments saw a sharp increase of 29%.
• Much of India’s foreign aid, particularly through lines of credit (LoCs), is directed towards its neighbourhood, with Bangladesh receiving the largest share.

The Path Forward

• Institutional Capacity Building: A Necessity for Long-term Growth
  • Beyond direct financial support, there is a pressing need for strengthening the MEA’s institutional capacity.
  • While India has made some strides in increasing its training budget, up by 30% in 2024-25, overall capacity-building initiatives remain inadequate.
  • The MEA’s funding for foreign missions, training programs, and cultural diplomacy saw only a modest 7% increase in the recent Budget, while critical academic institutions such as Nalanda University and South Asian University experienced significant cuts.
  • A more substantial investment in research and academic expertise is essential to develop a deeper understanding of foreign policy, based on evidence and analysis, which could, in turn, inform decision-making at the diplomatic level.
• The Need for Declassification and Digitisation of Diplomatic Records
  • A critical, yet often overlooked, component of India’s diplomatic strategy is the declassification and digitisation of its vast diplomatic archives.
  • As External Affairs Minister S. Jaishankar has noted, India’s diplomatic efforts have traditionally been led by government officials (Track 1), with scholarly research (Track 2) playing a secondary role.
  • However, the digitisation of India’s diplomatic records would provide greater access to scholars, enabling them to map India’s diplomatic history, challenge prevailing myths, and gain a more nuanced understanding of the historical and political contexts that shape India’s foreign policy.
  • This initiative could also assist current policymakers in drawing valuable lessons from past successes and failures, thereby improving India’s approach to global diplomacy.

Conclusion

• The Ministry of External Affairs plays a crucial role in advancing India’s foreign policy and global ambitions.
• However, the current budget allocation falls short of what is needed to fulfil the country’s strategic objectives.
• To position India as a global leader by 2047, the government must prioritise increasing the MEA’s budget, especially in areas related to regional cooperation, institutional capacity building, and research.