Context: The Prime Minister of India visited Male, Maldives on July 25-26 for the 60th anniversary of the Independence Day of the Maldives. It also marks the 60th anniversary of establishment of diplomatic relations between the two nations.
This visit signals renewed effort to strengthen bilateral ties amidst regional concerns. Earlier, the Indian PM had emphasised that Maldives represents concrete expression of India’s Neighbourhood First Policy.
Relevance:Mains: India and Neighbourhood relations: India-Maldives.
Key Highlights of Indian PM’s visit to Maldives
- India reiterated its commitment to further deepen ties with Maldives in keeping with its ‘Neighbourhood First’ and Vision MAHASAGAR policies.
- The leaders took stock of the progress in the implementation of the India-Maldives Joint Vision for a ‘Comprehensive Economic and Maritime Security Partnership’, adopted during the State Visit of the President of Maldives to India in 2024.
- There was a call to further strengthen defence and maritime security cooperation between the countries under the Colombo Security Conclave.
- As Global South partners, the countries emphasised to continue working on issues such as climate change, promotion of renewable energy, disaster risk reduction and weather science.
- The countries witnessed exchange of 6 MOUs in the fields of fisheries and aquaculture, meteorology, digital public infrastructure, UPI, Indian pharmacopoeia and concessional Line of Credit.
- India extended a new Line of Credit offering Rs 4850 crores (approx USD 550 million) in support of infrastructure development and other activities in Maldives.
- An Amendatory Agreement for the existing LoCs was also exchanged. It reduces Maldives’s annual debt repayment obligations by 40%.
- The countries exchanged Terms of Reference of the proposed Free Trade Agreement.
Ties between India and Maldives hit a rough patch over the India Out campaign that Mr. Muizzu had backed during his campaign (2023), and the Boycott Maldives social media campaign that followed over criticism of Mr. Modi by Maldivian Ministers.
India - Maldives: Evolution and Contemporary Issues
Importance of Maldives:
- Strategic location: In the Indian Ocean, Maldives archipelago comprising 1,200 coral islands lies next to key shipping lanes of communication which ensure uninterrupted energy supplies to countries like China, Japan, and India. More than 97% of India’s international trade by volume and 75% by value passes through the region.
- Member of SAARC: It is important for India to have the Maldives on board to maintain its leadership in the region. Maldives was the only SAARC country which seemed reluctant to follow India's call for a boycott of the SAARC summit in Pakistan after the Uri attack.
- Blue Economy: Maldives has an intrinsic role in advancing blue economy through sustainable management and utilisation of marine resources.
- Regional Security: India has the ambition to be a Net-security provider in the Indian Ocean region and this calls for close military and naval ties with Maldives so that India protects its own interests as well of its neighbours in the Indian Ocean region.
Area of Cooperation between India and Maldives
Economic Relations:
- Tourism development: Maldives' economy is heavily reliant on tourism (over 28% of GDP). State Bank of India has supported economic development of Maldives since 1974 by providing loan assistance for promotion of island resorts, export of marine products and business enterprises.
- Financial Assistance: India has provided substantial financial assistance to Maldives in the past, including-
- ₹3,000 crore currency swap arrangement under the SAARC framework.
- $1.4 billion financial assistance (2018) to help Maldives manage its mounting debt.
- India extended currency swap facility (2024) to help Maldives with its debt servicing and mitigate foreign exchange crises.
- Livelihood development: India developing High Impact Community Development Projects (HICDPs) in areas of livelihood and income generation, health, education, gender and child empowerment, sports and sustainable development. Over 45 HICDPs have been implemented across Maldives.
Defence Relations:
- Defence cooperation between India and Maldives ranges from-
- Providing training to Maldivian Defence Personnel in Indian Military Academy
- Supply of military equipment (E.g., Handover of two Dhruv helicopters and Dornier aircraft to Maldives National Defence Force for aerial surveillance)
- Provision of patrol vessels and coastal radar systems
- Joint combat exercises to help in maritime surveillance
- Exercise DOSTI- Maritime Search and Rescue (M-SAR), Humanitarian Assistance and Disaster Relief (HADR), Marine Pollution Response (POLRES), and Anti-piracy operations.
- Exercise EKUVERIN: This bilateral annual exercise commenced in 2009 at Belgaum, India.
Humanitarian Assistance and Disaster Relief (HADR):
- Operation Cactus: India saved Gayoom’s regime from a coup in 1984.
- 2004 Tsunami Relief: India was the first country to respond with aid, naval and air force assistance.
- COVID-19 pandemic: Supply of Made-in-India vaccines E.g., Covishield (first country to donate vaccines to Maldives.
People-to-People Relations:
- Indians are the second largest expatriate community in the Maldives. About 25% of Doctors and Teachers in Maldives are Indian nationals.
- India Cultural Center (ICC) in Male conducts courses in yoga, classical music and dance. Also, Hindi commercial films, TV serials and music are immensely popular in Maldives.
Present Challenges:
- Chinese Investment & Maldives-China FTA:
- Maldives’ growth is driven by massive infrastructure projects funded by China, including the development of Hulhule Island, Friendship bridge connecting it to Male etc.
- Maldives has also signed an FTA with China. This raises concerns regarding Chinese debt-trap policy.
- Political Instability: Internal political dynamics in Maldives lead to change in its foreign policy orientation. This has the potential to complicate its relations with India.
- Religious Radicalisation: Its political instability has also challenged overall security of the Indian Ocean by increasing radicalisation, with reports of Maldivians joining the Islamic State.
Way Forward
- Both countries need to enhance regional cooperation by using common platforms such as the Indian Ocean RIM Association and Indian Ocean Naval Symposium.
- India needs to implement its ‘Neighbourhood First Policy’ with strategic sensitivity and keeping vigilance about China's growing influence.