‘The budget for the Ministry of External Affair deserves closer scrutiny’
| Photo Credit: The Hindu

When the Union Budget is presented every year, most of the public attention often centres on taxation, infrastructure, and defence. In this, however, the budget for India’s Ministry of External Affairs (MEA) deserves closer scrutiny. Last year, the MEA budget saw a rare 23% spike, up from the modest 4% annual increase between 2017 and 2023. Despite efficient Budget utilisation, exceeding 96% of the revised estimates, the MEA remains one of the least-funded Ministries. The MEA’s allocation not only reflects the government’s foreign policy priorities but also its capacity to deliver on its global ambitions and commitments.

The vision of a ‘Viksit Bharat’ by 2047 hinges on sustained global partnerships. Here, India is positioning itself as a global leader: from leading the Global South; strengthening ties with the Association of Southeast Asian Nations; enhancing regional connectivity, engaging with the Quad (India, Australia, Japan and the U.S.) and creating institutions such as the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure.

Impact on plans

Partner countries also expect more from India, requiring a stronger MEA. Countries anticipate timely project delivery, financial support, and diplomatic follow-through. Yet, the MEA’s current budget — just 0.4% of India’s overall expenditure — falls short to deliver on these plans. In 2022, the Parliamentary Standing Committee on External Affairs suggested raising this to 1% of the total budget. While such an increase (approximately 63%) seems unlikely, even a gradual increase to 0.6% or 0.8% would signal intent.

Two areas demand greater budgetary resources to beef up India’s diplomatic clout: economic tools for regional integration and cooperation, and the MEA’s institutional capacity by expanding human resources and research expertise. India’s regional connectivity faced new challenges in 2024, including Bangladesh’s regime change, Myanmar’s instability, strained ties with Nepal, and the Maldives’ “India Out” stance. But visits by Sri Lanka’s President and Bhutan’s Prime Minister bolstered commitments in cross-border projects. Sustaining momentum under the ‘Neighbourhood First’ policy requires economic support, amid China’s growing influence. Enhanced financial backing is crucial for advancing connectivity initiatives in South Asia.

Foreign aid and shifts

Budgetary trends reveal nuanced shifts. India’s aid to foreign countries declined by 10% in 2024-25, while loans to foreign governments, increased by 29%. Approximately 50% of India’s grants is directed to its neighbourhood. Bhutan remained the largest recipient of Indian aid, reflecting historical ties and a new impetus on energy interdependence, including hydropower development and sub-regional grid connectivity. Aid to Bangladesh declined from ₹200 crore in 2023-24 to ₹120 crore in 2024-25, while Sri Lanka saw a 63% increase in budgetary allocation.

A notable shift is the move from outright grants to lines of credit (LoCs), with 45% of the LoCs directed to the neighbourhood, Bangladesh being the largest recipient at $7.86 billion. While LoCs enable sustainable infrastructure financing, they also demand robust disbursement and oversight mechanisms, stretching India’s diplomatic machinery.

Another critical indicator is MEA resources to build institutional capacity. These are less visible but critical catalysts to enable long-term growth, including through a stronger Indian Foreign Service (IFS), supported by an expert research ecosystem.

While the MEA’s training budget saw a 30% increase in 2024-25, overall capacity-building allocations remain insufficient. The IFS remains a chronically understaffed diplomatic corps. Coordination challenges, delayed expansion plans, and limited lateral entry efforts hinder progress.

Last year’s MEA budget allocation for its foreign missions, training programmes, and cultural diplomacy grew by only 7% but key academic institutions such as Nalanda University and South Asian University experienced cuts of 20% and 22%, respectively. While the MEA has invested massively in convening international conferences and dialogues to foster India’s image as a bridging and argumentative power, it must also find more budgetary resources to support policy-relevant and evidence-based research at Indian universities and think tanks.

Need for declassification, digitisation

According to the External Affairs Minister, S. Jaishankar, “Track 1 has been consistently ahead of Track 2 when it comes to diplomacy, foreign policy, and keeping up with the world.” If this is the reality, and “needs change” as the Minister beckoned, the MEA could lead by example by allocating specific resources in the next Budget to accelerate the declassification and the digitisation of hundreds of thousands of its records. Public e-access will help scholars map India’s rich diplomatic history, contest deeply-held myths and get a better grasp of the underappreciated context and constraints that regulate Track 1 decision-making. And in turn, such Track 2 research may also help current MEA decision-makers to learn from past successes and failures, avoid reinventing the wheel, and articulate India’s uniqueness based on the power of historical record, rather than mere political proclamation.

Riya Sinha is Associate Fellow at the Centre for Social and Economic Progress (CSEP), New Delhi. Constantino Xavier is Senior Fellow at the Centre for Social and Economic Progress (CSEP), New Delhi. The views expressed are personal

New Delhi:

The Ministry of External Affairs on Tuesday signed a Project Implementation Agreement with the International Solar Alliance to operationalize a solar project worth USD 2 million in Fiji, Comros, Madagascar, and the Seychelles, according to an official release.

This development comes after India committed to invest USD 2 million in new solar projects in these Indo-Pacific countries under Quad Climate Working Group initiative

Following the signing of the agreement, MEA Spokesperson Randhir Jaiswal took to social media platform X to highlight India’s commitment to renewables and just energy transitions in island nations of the Indo-Pacific.

New chapter in Quad Climate Initiatives.

A Project Implementation Agreement was signed between Ministry of External Affairs and International Solar Alliance to operationalise solar projects in Comoros, Fiji, Madagascar and Seychelles.

These projects underscore ’s Quad… pic.twitter.com/GrIScJxXTP

— Randhir Jaiswal (@MEAIndia) November 26, 2024

As per a study undertaken by the ISA, the countries under consideration for solar projects have energy issues related to the perishability of agriculture products, unreliable electricity supply in health centers, and irrigation purposes in remote areas where grid power supply or solar mini grids are not available yet, the release stated.

Solar projects in these countries are focused on the areas of cold storage, solarization of health care facilities, and solar water pumping systems are under consideration, the release stated.

The successful execution of these projects is expected to enhance energy access, create employment, and provide reliable and quality power supply in these Indo-Pacific countries, the release stated.

Solar energy is a viable solution to help these countries address climate change-related challenges.

“The latest round of clean energy investments by India in these countries strengthens the nation’s commitment of the Quad to address the challenges posed by climate change and facilitate their transition to a clean energy economy for the people, planet and our shared prosperity,” the MEA release added.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

The Ministry of External Affairs on Tuesday signed a Project Implementation Agreement with the International Solar Alliance to operationalize a solar project worth USD 2 million in Fiji, Comros, Madagascar, and the Seychelles, according to an official release.

This development comes after India committed to invest USD 2 million in new solar projects in these Indo-Pacific countries under Quad Climate Working Group initiative

Following the signing of the agreement, MEA Spokesperson Randhir Jaiswal took to social media platform X to highlight India’s commitment to renewables and just energy transitions in island nations of the Indo-Pacific.

New chapter in Quad Climate Initiatives.

A Project Implementation Agreement was signed between Ministry of External Affairs and International Solar Alliance to operationalise solar projects in Comoros, Fiji, Madagascar and Seychelles.

These projects underscore ’s Quad… pic.twitter.com/GrIScJxXTP

— Randhir Jaiswal (@MEAIndia) November 26, 2024

As per a study undertaken by the ISA, the countries under consideration for solar projects have energy issues related to the perishability of agriculture products, unreliable electricity supply in health centers, and irrigation purposes in remote areas where grid power supply or solar mini grids are not available yet, the release stated.

Solar projects in these countries are focused on the areas of cold storage, solarization of health care facilities, and solar water pumping systems are under consideration, the release stated.

The successful execution of these projects is expected to enhance energy access, create employment, and provide reliable and quality power supply in these Indo-Pacific countries, the release stated.

Solar energy is a viable solution to help these countries address climate change-related challenges.

“The latest round of clean energy investments by India in these countries strengthens the nation’s commitment of the Quad to address the challenges posed by climate change and facilitate their transition to a clean energy economy for the people, planet and our shared prosperity,” the MEA release added.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Solar panels installed on top of a apartment building. Representational image
| Photo Credit: MURALI KUMAR K / The Hindu

By the end of 2024, global solar manufacturing capacity is likely to reach over 1,100 GW, far exceeding the demand for photovoltaic panels. The sector experienced significant growth in 2023, with solar cell, wafers and modules capacity nearly doubling in comparison with the previous year. However, this led to a market oversupply that brought down module prices by more than a half and resulting in negative margins for manufacturers in 2024, according to the World Solar Market Report 2024 that was made public at the International Solar Alliance (ISA) conclave here on Tuesday.

“Due to these market pressures, global supply chain investments are expected to slow, with the anticipated capacity for 2030 expected to be lower than anticipated (in 2023). China will continue to dominate solar photovoltaic manufacturing through 2030, holding over 80% of the global capacity across all photovoltaic segments. The centralisation of the solar PV supply chain, while efficient, presents risks that could hinder renewable energy advancements. To counteract the vulnerabilities of a centralised supply chain, the industry is shifting towards diversification, leveraging technological advancements, and enacting supportive policies to build a more resilient system,” the report noted.

Over the last two decades, global solar capacity rose from 1.22 GW (gigawatt) in 2000 to 1,418.97 GW in 2023 — or a 40% annual growth rate. In 2023 alone, 345.83 GW of solar power was added, accounting for three-quarters of all new renewable capacity worldwide.

As of 2023, China holds 43% (609 GW) of the cumulative capacity globally, underscoring its position as the world’s leading solar energy producer. The United States was the next biggest country contributing 10% (137.73 GW). Japan, Germany, and India each captured between 5-6% share.

“In a week, the world leaders will convene in Azerbaijan under the aegis of COP29 with two guiding goals: agree to transition away from fossil fuels, triple renewable power and double energy efficiency by 2030. Both of these goals can be built on the foundations of efficient and clean technologies, hence underlining the importance of today’s proceedings,” Ajay Mathur, Director General, ISA said in a statement.

“The membership of the International Solar Alliance is open to all member states of the United Nations and everyone is welcome to join,” Mr. Singh said.
| Photo Credit: AP

China was welcome to be part of the International Solar Alliance (ISA), as the membership of the 116-country compact was open to all, R.K. Singh, Minister for Power and Renewable Energy, said at the inaugural session of the International Solar Alliance (ISA) Assembly here on Tuesday.

“The membership of the International Solar Alliance is open to all member states of the United Nations and everyone is welcome to join,” Mr. Singh, who’s also Co-President, ISA Assembly, said in response to a question from The Hindu on why China, despite being the largest producer and supplier of solar panels globally, wasn’t a member of the group which was formed in 2015 under the leadership of India and France.

“It is true that 80% of the manufacturing capacity, polysilicon wafers and above, is in China. However, there is a need to diversify manufacturing and this was particularly apparent during the pandemic. So most countries have now set up their own manufacturing facilities,” Mr. Singh said.

The ISA was set up following a decision at the historic 21st meeting of the United Nations Conference of Parties in Paris, that resulted in the ‘Paris Agreement’, where countries committed to keep temperatures from rising beyond 2 degrees Celsius and “as far as possible” below 1.5 degrees Celsius. While there have been feelers, since 2018, of China possibly joining the ISA, nothing has materialised and the freeze in diplomatic relations between India and China has further stalled progress, sources told The Hindu.

The ISA, which has its Secretariat in Gurugram, Haryana, aims to mobilise $1,000 billion in solar energy solutions by 2030 while delivering energy access to a billion people by installing 1,000 gigawatt (1 gigawatt or GW is 1000 megawatt or MW). This the organisation estimates would cut a billion tonnes of CO2 annually. Its key thrust, as part of this goal, is to expand solar panel installations in Africa. “Last year, of the $310 billion invested in solar power, less than 3% was invested in Africa. For this reason, much of the efforts are to increase investment in big solar plants as well as small solar micro-grids, rooftop solar, solar cold storages, etc. In the past year, we have invested in 20 solar start-ups in Africa,” Ajay Mathur, Director-General, ISA, said.

In several African countries, the dominant investor and developer of clean energy projects is China. South Africa, for instance, quadrupled its imports of solar panels from China in the first half of 2023 and Africa, overall, has doubled its imports of Chinese solar panels. Panel exports from the country grew 34% over the previous year to 114 GW, more than the total installed solar capacity of the United States of 113 GW, a 2023 report from U.K. research firm Ember said. However, African imports pale in comparison to the 66GW imported by Europe and the 9.5GW by Brazil.

India, once a significant importer of panels from China, has stepped up domestic manufacturing and reduced such imports. In 2023, it imported only 2.3GW worth of panels compared to the 9.8GW in 2022. It has, however, stepped up imports of solar cells to make its own panels and export.