Why in the News?
Recently, Indian Prime Minister paid an official visit to Maldives marking 60 years of diplomatic ties.
Key outcomes of the visits
- Extension of Line of Credit (LoC) of INR 4,850 crores to Maldives and reduction of annual debt repayment obligations of Maldives on Government of India-funded LoCs.
- Launch of India-Maldives Free Trade Agreement (IMFTA) negotiations and mutual agreement on its Terms of Reference.
- Agreement between NPCI International Payment Limited and Maldives Monetary Authority for launching UPI in Maldives.
- Various MoUs and agreements in field of Fisheries & Aquaculture, Digital Solution and recognition of Indian Pharmacopoeia were also signed.
Areas of Cooperation
India and Maldives share ethnic, linguistic, cultural, religious and commercial links. India was among the first to recognize Maldives after its independence in 1965 and to establish diplomatic relations with the country.
- Strategic Location and Proximity: Maldives is geographically positioned like a 'toll gate' between the western Indian Ocean (Gulf of Aden and Strait of Hormuz) and eastern Indian Ocean (Strait of Malacca).
- Maldives' proximity to India's west coast and its location at the hub of key Indian Ocean sea-lanes give it significant strategic importance for India.
- Net Security Provider: India is seen as a net security provider to the Maldives. It has been affirmed as Maldives holds a special place in India's "Neighbourhood First" Policy, contributing to India's Vision MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions) for the Indian Ocean Region (IOR).
- Defence Cooperation and Security: A comprehensive Action Plan for Defence (2016) has been signed to consolidate defence partnership. Joint exercises include Ekuverin, Ekatha, etc.
- Maldives has also joined Colombo Security Conclave as a founding member.
- Economic Integration: Bilateral trade crossed USD 548.97 million (2023), with India emerging as Maldives largest trading partner in 2023.
- Humanitarian Diplomacy and "First Responder" during crises: India has consistently been the "first responder" to Maldives during times of distress. It includes prompt assistance during coup attempt (1988), Tsunami (2004), Male water crisis (2014), Covid-19 pandemic etc.
- Extensive P2P Linkages: India has become a top tourist market for Maldives, with over 2.09 lakh Indian tourist arrivals in 2023.
Recent Irritants in the bilateral relations
- Domestic Politics of Maldives: Maldives' internal political environment is largely polarized to 'Anti or Pro- India or China'.
- Strategic Realignment under President Muizzu:
- Elected on a nationalist mandate of "India out Campaign", it fuelled anti-India public sentiments. It led to cancellation of hydrographical surveys, withdrawal of Indian Military personnel, etc.
- Maldives changed its policy from "India first policy" to a "Maldives first" policy which aimed to diversify the Maldives' foreign policy.
- China Factor: Maldives joined China's Belt and Road Initiative (BRI) in 2014 and China has made several large infrastructure investments. E.g., China-Maldives Friendship Bridge.
- Economic instability: With high fiscal deficits and moderation in GDP growth, public debt of Maldives is projected to rise to 135.7% of GDP in 2027. (World Bank).
- Radicalization: USA in 2023 designated financial facilitators and operatives of ISIS and Al Qaeda in the Maldives.
Conclusion
India and Maldives share common challenges in the Indian Ocean Region which have multi-dimensional implications for the security and development of both the countries. As natural partners, both must work together in advancing the maritime and security cooperation for the benefit of peoples of both India and Maldives as well as for the larger Indian Ocean Region.
