Context: The Foreign Minister of Maldives is on a three-day visit to India to explore ways to bolster ties in key areas including maritime security, trade and investment.
Relevance: Mains: India and Neighbourhood relations: India-Maldives.
Key Takeaways from the Maldives Foreign Minister’s Visit to India
- Strengthening of India-Maldives ties:
- The visit focused on revitalising bilateral relations after a temporary strain due to political changes in the Maldives.
- Both countries reaffirmed their commitment to enhancing cooperation in key areas such as maritime security, trade, and investment.
- Agreement on local currency use:
- A framework was finalised to promote the use of local currencies (Indian Rupee and Maldivian Rufiyaa) for cross-border trade, reducing dependency on third-country currencies.
- High-Impact Community Development Projects (HICDP):
- A Memorandum of Understanding (MoU) was signed to launch Phase III of the High-Impact Community Development Projects.
- These projects, funded by Indian grant assistance, aim to benefit local communities directly at the grassroots level.
- India’s Neighbourhood First Policy:
- India emphasised that Maldives represents a very concrete expression of India’s neighbourhood first policy, reflecting India’s priority on close cooperation with its neighbors.
- Progress on Comprehensive Partnership:
- The two Ministers reviewed the progress made on agreements signed during Maldivian President Mohamed Muizzu’s visit to India in October 2024, which include initiatives under the Comprehensive Economic and Maritime Security Partnership and ongoing negotiations for a Free Trade Agreement (FTA).
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.
- Regional Security: As the pre-eminent South Asian power and a 'net security provider' in the Indian Ocean region, India needs to cooperate with the Maldives in security and defense sectors.
- Member of SAARC: It is important for India to have the Maldives on board to maintain its leadership in the region. The 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: The Maldives has an intrinsic role in advancing the blue economy through sustainable management and utilisation of marine resources.
- Geo-political significance:
- India has the ambition to be ‘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.
- China is rapidly expanding its footprint in the Maldives though it opened an embassy in the island nation only in 2011. Thus, it becomes geo-politically and strategically important for India to maintain its presence in Maldives.
Area of Cooperation between India and Maldives:
Economic Relations:
- Tourism development: State Bank of India has been playing a vital role in the economic development of the Maldives since 1974 by providing loan assistance for promotion of island resorts, the export of marine products and business enterprises.
- Financial Assistance:
- India has provided substantial financial assistance to Maldives in the past, including US $ 100 million Standby Credit facility (SCF) to the Maldives and a ₹3,000 crore currency swap arrangement.
- In 2018, India announced a $1.4 billion financial assistance to help Maldives manage its mounting debt.
- 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.
Defence Relations:
- Defence cooperation between India and Maldives ranges from training and joint combat exercises to help in maritime surveillance as well as the supply of military equipment to the country.
- Exercise DOSTI: The focus of these exercises was on 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.
- Post Tsunami: After the tsunami that struck the Maldives on December 26, 2004, India was the first country to rush relief and aid to the 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.