The termination of GMR contract — biggest foreign direct investment in the history of Maldives — brings to the fore the challenges India is facing from its neighbours. In early 2011, Indian ambassador to Myanmar had written to the prime minister’s office and then foreign secretary, suggesting India should exit from Tamanthi hydro power project. Irked by the local government policies, he had suggested exiting from the project would be better than "expending further diplomatic capital on seeking clearances..."  

Incidentally, the Chinese are trying hard to make huge inroads into Maldives and their clout is overwhelming in Myanmar also. Meanwhile, India is making efforts to get the private sector to play a more pro-active role to take up projects abroad.

Indian ambassador to Myanmar VS Seshadri had cited domestic issues in Myanmar to suggest an early exit from the 1,200-mw Tamanthi project. The plan for the project, which was launched in collaboration with NHPC, was finalised in 2006 and it followed a pact between the two countries in 2004.

Myanmar is the only South east Asian country with which India shares its boundary. India's hesitance in not engaging with the military junta in Myanmar in 1990’s ensured that Chinese got headway there.

Maldives has also a key place in India's economic and strategic plans. Over 97% of India’s international trade by volume and 75% by value passes through the Indian Ocean.

But with the ouster of former president Mohammed Nasheed, India is having an uneasy time with the neighbour.

The two countries were in a diplomatic row over intemperate remarks made against the Indian high commissioner by the spokesperson to Maldives president.