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Context:
- Newly elected Maldivian President, Ibrahim Mohamed Solih, visited India in December 2018.
Background
- India and Maldives share ethnic, linguistic, cultural, religious and commercial links and enjoy close, cordial and multi-dimensional relations. India was among the first to recognise Maldives after its independence in 1965 and to establish diplomatic relations with the country.
- As per India’s “Neighborhood First Policy,” India “stands ready to fully support the Government of Maldives in its socio-economic development” and Maldivian government has reiterated its “India First” policy”e. to work closely with the government of India on all issues.
Maldives importance to India:
Security:
- Geostrategic: Maldives is located just 700 km from the strategic Lakshadweep island chain and 1,200 km from the Indian mainland, and the growing Chinese presence in the archipelago could have serious security implications.
- Indian Ocean Region hegemony:Chinese heavy presence in Maldives would have given China an opportunity and a base to influence and control the Indian Ocean region.Also, the energy supplies coming from Gulf nations to India pass through this area.
- Regional imbalance: India enjoys unparalleled access and influence in many of the Indian Ocean island states, including the Maldives, Seychelles, and Mauritius which has been a problem for China. China-Maldives bonhomie can act as a counter to Indian influence in the region.
Economic:
- Indian expatriates: There are about 25,000 Indian expatriates in Maldives who are engaged in a number of professional pursuits and their security is also of prime concern for India.
- Blue economy:Maldives plays an integral role in realising the potential of Indian Ocean blue economy as a contributor to the security and sustainable development of sea resources.
- Tourism: India and Maldives see regular tourist visits between the two and Indian tourists also account for close to 6% of tourists Maldives receives each year.
- Health: India is a preferred destination for Maldives citizens seeking health services, which boosts Indian healthcare sector.
Political:
- Political chaos: Uncertainty in Maldives could prove a fertile breeding ground for extremism and religious fundamentalism, smuggling and drug trafficking.Islamic State (IS) and Lashkar-e-Taiba are also reported to have established bases in Maldives.
SAARC factor:
- SAARC has a special importance for India because it includes all India’s neighbors and excludes China. Of lately, China has been creating inroads into SAARC countries which is reducing India’s influence in the bloc, for example Pakistan’s CPEC, China’s Hambantota port etc. and Maldives could be China’s next destination.
Recent development in India-Maldives relation
India and Maldives relations have seen many ups and downs caused by changing political situations in both countries and some external factors. During Maldivian Presidential elections in 2013 Abdulla Yameen defeated Mohamed Nasheed to become the President. During Yameen’s term, Maldives relations with India deteriorated while its closeness with China increased, which is highlighted by:
- Cancellation of GMR project, 2012:Maldives annulled the $500 million contract with GMR Group to develop a modern International Airport near Male, which was later given to a Chinese company.
- Cancellation of Indian PM’s trip, 2015:Due to turbulent political situation in Maldives, Indian PMcancelled his trip to Maldives.
- Island lease to China, 2016:Maldives signed a new law permitting developers to own islands on lease for development and subsequently, a Chinese company took control of FeydhooFinolhu, an uninhabited island close to Male and its international airport, on a development lease for 50 years.
- BRI and MSR, 2017: Maldives endorsed China’s Belt and Road Initiative (BRI) and signed MoU on Maritime Silk Road, following which China has invested billions of dollars in Maldives building highways and housing as part of BRI.
- China Maldives FTA, 2017: China and Maldives signed an FTA, which is China’s second FTA with a South Asian country after Pakistan, while there is no FTA between India and Maldives.
- Joint patrolling with Pakistan, 2018:During Pakistan’s Army Chief’s visit, Maldives announced joint patrolling with Pak Navy to guard Maldivian Exclusive Economic Zone, with an indirect reference to a perceived threat from India.
- India’s concern about emergency, 2018:India’s ties with Maldives nose-dived after it criticised the Abdulla Yameen government for imposing a 45-day emergency earlier in 2018.
- Returns Indian helicopters, 2018: Maldives asked India to take back the two helicopters given to Maldives along with the training personnel who were there on the invitation of Maldivian Government.
- Denial of work permits, 2018:Maldives denied work permits to nearly 2000 Indians working there, while no action was taken against thousands of Bangladeshis who were over staying beyond the work permit periods.
During all these negative developments in Maldives, India responded with patience and composure, trying to revive relations diplomatically. However, the election of Solih,in 2018, as new President of Maldives has caused a thaw in India Maldives relations which can be gauged by:
- Despite opposition from Indian Ocean Rim Association, India convinced IORA Committee for Senior Officials in favour of Male, following which Maldives was inducted as the newest member of IORA recently.
- Maldives has asked India for a Dornier aircraft and the MEA has responded positively to its request.
- Maldives’ new government has decided to pull out of the free trade agreement (FTA) with China, realizing the one-sided nature of the FTA.
Highlights of recent visit of Solih to India, December 2018:
• India and Maldives signed the following agreements:
o Agreement on the Facilitation of Visa Arrangements
o MoU on Cultural Cooperation and for Establishing Mutual Cooperation to Improve the Ecosystem for Agribusiness.
o Joint Declaration of Intent on Cooperation in the field of ICT and Electronics.
• India and Maldives agreed to work together to create institutional linkages and to establish a framework of cooperation in the following areas:
o Health cooperation issues particularly cancer treatment.
o Mutual Legal Assistance on Criminal Matters.
o Investment promotion.
o Human Resource Development.
o Tourism and climate change.
o Private sector involvement in development of housing and infrastructure.
o Water and sewerage systems in the outlying islands of Maldives.
o Combating terrorism and piracy in the Indian Ocean.
o Reforming the UN General Assembly and the Security Council.
• India announced financial assistance of US $ 1.4 billion in the form of budgetary support, currency swap and concessional
lines of credit for socio-economic development of Maldives.
• Both agreed to strengthen cooperation to enhance maritime security in the IOR through coordinated patrolling and aerial surveillance, exchange of information and capacity building.
• Maldives expressed its support for India’s candidature for permanent membership of UNSC and India’s candidature for a non-permanent seat for the year 2020-21. India on its part welcomed Maldives’ re-entry into Commonwealth.
• India and Maldives signed the following agreements:
o Agreement on the Facilitation of Visa Arrangements
o MoU on Cultural Cooperation and for Establishing Mutual Cooperation to Improve the Ecosystem for Agribusiness.
o Joint Declaration of Intent on Cooperation in the field of ICT and Electronics.
• India and Maldives agreed to work together to create institutional linkages and to establish a framework of cooperation in the following areas:
o Health cooperation issues particularly cancer treatment.
o Mutual Legal Assistance on Criminal Matters.
o Investment promotion.
o Human Resource Development.
o Tourism and climate change.
o Private sector involvement in development of housing and infrastructure.
o Water and sewerage systems in the outlying islands of Maldives.
o Combating terrorism and piracy in the Indian Ocean.
o Reforming the UN General Assembly and the Security Council.
• India announced financial assistance of US $ 1.4 billion in the form of budgetary support, currency swap and concessional
lines of credit for socio-economic development of Maldives.
• Both agreed to strengthen cooperation to enhance maritime security in the IOR through coordinated patrolling and aerial surveillance, exchange of information and capacity building.
• Maldives expressed its support for India’s candidature for permanent membership of UNSC and India’s candidature for a non-permanent seat for the year 2020-21. India on its part welcomed Maldives’ re-entry into Commonwealth.
Concerns between India and Maldives:
- Chinese inroads: Chinese infrastructure projects in Maldives directly compete with Indian infrastructure companies’ business prospects.
- China Maldives FTA: An FTA with China would have raised the issue of diverting Chinese products into India through Maldives. Maldivian government has not cleared its stand on future Chinese investments yet and may continue to engage deeply with China.
- Low bilateral trade: Bilateral trade between both, which stands at US $200 million annually, is quite low.
Way forward:
Recent change in the attitude of Maldivian government is an opportune moment for India to redraw flailing bilateral relations between bothby helping Maldives to resuscitate its economy.some major area of confidence building are
- Investment cooperation with Maldives should be enhanced by establishing an advisory cell to guide all stake-holders i.e. Indian missions overseas and prospective Indian investors, to delineate touchy areas and risky investments, with full knowledge of the local conditions.
- ‘Free-purse’policy of aid to Maldives is needed if India wants to offset Chinese big-ticket investments in Maldives.
- India must enhance anti-terrorism cooperation and intensify cooperation in the areas of training and capacity building of the Maldives National Defense Force and the Maldives Police Service.
- India needs to be mindful of timely delivery of projects as it will be compared with Chinese who have timely delivered projects in Maldives.
- A regular bilateral security dialogue amongst the officials of both sides should be instituted to expand the scope of security cooperation. This should be supplemented by Track-II and Track-1.5 dialogues.
- While dealing with smaller neighbors like Maldives, India needs to become a lot more magnanimous, staying true to its own “Gujral doctrine,” thus creating greater confidence.
- The SAARC and IORA can provide a platform to work on lingering concerns. Moreover, India, Maldives and Sri Lanka can explore ways to strengthen trilateral mechanisms to address these issues.
- India must collaborate with like-minded countries like EU and US for reducing Maldives’ dependence on China by strengthening the democratic institutions, like US committed a $ 10 million aid for training Maldivian military personnel recently.
