Prime Minister (PM) Narendra Modi visit to the Maldives recently as the guest of honour at the island nation’s independence day holds significance on multiple fronts. First and foremost, the State visit brings a diplomatic score for India, following Maldives President Mohamed Muizzu’s anti-India electoral campaign. Gradually restoring warmth in Delhi-Male is crucial, particularly as ties with close neighbour like Bangladesh have altered over time since a year. The success of Modi’s visit to Male is notably outcome-oriented, coming at a time when his neighbourhood first policy gets questioned over cooling relations with neighbours.
PM Modi attended the 60th Independence Day celebrations of Maldives at the Republic Square in Male as the Guest of Honour. (DPR PMO)
Second, the archipelagic nation remains an irreplaceable strategic partner and the both nations follow Colombo Security Conclave arrangements. Concurrently, India is actively preparing to expand its market presence in the Maldives, currently engaged in Free Trade Agreement (FTA) talks. This is vital to counterbalance the growing influx of Chinese goods. Last and most important, Maldives holds a special place for India’s burgeoning upper-middle class, serving as a top-tier honeymoon destination and a favoured locale for Bollywood stars and celebrities over weekend--a status bolstered by Maldives’ charm.
During his visit to Maldives, PM Modi signed eight bilateral accords, unveiled a $ 565 million credit line ( ₹480 crore) and announced a reduction in repayments of an earlier credit line from $ 51 million to $ 29 million annually. The credit line will be utilised for the projects like hospital developments, housing development, sport infrastructure and school, according to President Muizzu’s media response. In the line of FTA, the two nations tabled the talks of a bilateral investment treaty with the fast-paced capacity-building nation during the visit.
Maldives was once among the least import-dependent island nations in the world, but it has now become highly reliant on imports for supplies. And depends on tourism for revenue. Despite India’s vast arable land, wide range of essential products and close proximity, bilateral trade between India and Maldives remains lower than expected. The trade volume reached $ 548 million in 2023, showing a boost from approximately $ 300 million in 2021.
The growing Maldivian dependence on duty-free Chinese imports threatens to undercut Indian exports, as Indian goods face tariffs while Chinese products do not, potentially leading to a loss of market share for India in the Maldives. India is concerned about the erosion of its traditional trading position and geopolitical influence in the region.
Male’s visa-free access for Indian business tourists has sparked interest within the Indian business community. In terms of financial cooperation, India has much to offer the Maldives. During external affairs minister S Jaishankar’s state visit to Male in August 2024, India and Maldives signed an agreement to implement India’s UPI system across the Maldives.
Former President Ibrahim Mohamed Solih, belonging to the Maldivian Democratic Party stated that approximately $ 450 million of the $ 800 million Lines of Credit extended by India during his administration from 2019 to 2023 remained unused at the end of his term and urged the incumbent to effectively utilise these remaining funds in ways that benefit the public.
In the recent past, India has built a cricket stadium in Kandahar and helped Afghan cricket to develop. President Solih, who religiously follow cricket once requested India to help the island nation develop its cricket infrastructure and coach young people. The nation is a member of Asian Cricket Council and an affiliate of the International Cricket Council. India’s support could be game changer in establishing a professional cricket brigade in the island nation.
During PM Modi’s two-day State visit, India has presented 72 vehicles to the Maldives National Defence Force. Improving defence ties with Male is a boost to bilateral ties. Despite calls for the removal of Indian defence systems from the island, India has been training Maldives' defence personnel, and carrying out naval exercises with the archipelagic nation. India is also supporting Male to enhance its capacity for EEZ surveillance and maritime domain awareness through the provision of ships and assets. However, Maldives under Muizzu will continue to depend on China and to some extent Turkey for defence hardware.
In the election, President Muizzu secured votes for his league People’s National Congress with an anti-India campaign but eventually recognised the benefits India brings to Maldives. In his 2019 address to the Maldivian parliament Majlis, PM Modi announced India’s support for the conservation of Maldives’ historic Friday Mosque, known as Hukuru Miskiy, a unique coral-stone mosque. Moving forward, a sustained partnership between Male and Delhi is crucial to address environmental challenges, health care needs, and youth engagement through cricket, regardless of political changes in Male.
This article is authored by Ayanangsha Maitra, journalist and programme coordinator, Center of Geoeconomics for the Global South, UAE.
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