MEA's shrinking share amid India's global ambitions flags funding gap

Despite higher outlay, MEA's share in Budget remains low, raising concerns over funding gaps as India expands its global diplomatic footprint

In its report on the Ministry of External Affairs’ (MEA’s) demand for grants tabled in Parliament on March 17, the parliamentary standing committee on external affairs noted that the ministry has been allocated ₹22,118.97 crore in the Budget Estimates (BE) for 2026-27 (FY27). This is an increase of 7.81 per cent over the FY26 BE of ₹20,516.61 crore and 1.73 per cent over the FY26 Revised Estimates (RE) of ₹21,742.74 crore. 

As a proportion of the total FY27 Budget of ₹53.47 trillion, the MEA’s allocation stands at 0.41 per cent, the same as FY26 — a significant decline since FY18, when its share was 0.69 per cent. 

The committee observed that while the absolute allocation has increased in nominal terms, the proportional share has remained relatively low, even as India’s global ambitions, diplomatic footprint, and development partnership commitments have expanded substantially. 

In absolute terms, India allocates approximately 0.06 per cent of its GDP to foreign affairs, which compares unfavourably with countries such as the US (approximately 0.15-0.20 per cent of GDP) and the UK (approximately 0.25-0.30 per cent of GDP). The committee noted that the MEA is ranked 23rd among Union ministries in terms of budgetary allocation. 

In an earlier demand for grants in FY26, the committee had specifically recommended a budgetary enhancement of at least 20 per cent in MEA’s allocation. The ministry then told the panel that this was formally communicated to the Finance Ministry ahead of the pre-Budget consultations. Despite this, the eventual increase was limited to 7.81 per cent. The committee reiterated its earlier recommendation for a budgetary enhancement of at least 20 per cent and urged the Centre that the MEA’s allocation be progressively raised to a level closer to the global benchmark. 

The committee said that there has been a persistent gap between the MEA’s budgetary demands and the actual allocations. It acknowledged that the gap has narrowed this year, but remained concerned about the structural underfunding that needs to be addressed for continued effective diplomacy.