India –Maldives Relations

Source-This post on India –Maldives Relations has been created based on the article “From China tilt to a balancing with Beijing and Delhi” published in “The Hindu” on 25 June 20204.

UPSC Syllabus-GS Paper-2- India and its Neighborhood- Relations.

Context– The article discusses the Maldivian President’s fluctuating policy stance towards India, which has shifted from criticism to engagement. Initially, he aimed to reduce dependence on India, increase relations with China, and diversify foreign relations. However, he has also accepted invitations to important Indian events, such as the Prime Minister’s swearing-in ceremony in June 2024.

What factors influenced Mohamed Muizzu’s foreign policy towards India?

1) Internal and External Factors– His foreign policy is influenced by internal and external factors. It advocated the “India Out” campaign and taken efforts to distance the Maldives from India by appealing to nationalist and religious sentiments among voters.

2) Pro-China Tilt-He is closely aligned with China, seeing it as an efficient partner for funding their ambitious projects.

3) Diversification of Relations-Due to the Maldives’ increasing geostrategic significance, Muizzu intends to enhance relations with nations such as Japan, Saudi Arabia, Turkey, the UAE, UK, and USA while decreasing reliance on India.

What are the reasons behind Mr Muizzu’s changed stance toward India?

There’s a shift in his strategy as he realizes the importance of balancing relationships with India and China rather than favoring one over the other. Amid regional competition between India and China, Mr. Muizzu aims to enhance the Maldives’ interests by leveraging his position.

1) Economic Difficulties-

A) The Maldives faces rising debt payments, low income, and shrinking foreign reserves. It has a high debt-to-GDP ratio of 110% and holds $622 million in foreign reserves.

B) Dependent on imports, the government struggles with food and fuel price hikes and limited production capacity. It has persuaded major import partners like India and China to pay in local currency to ease its financial pressures.

A detailed article on India-Maldives Relations can be read here.

2) Lackluster Response from China-

A) China is hesitant to invest in big Maldivian infrastructure projects, preferring community development, housing, and capacity-building efforts.

B) The Maldives owes China about $1.5 billion. China initially offered five years of debt relief, but recent updates suggest this might complicate future borrowing. The Chinese Ambassador is cautious about new loans because Male’s debt is rising. This indicates that China may opt to provide grants instead.

3) Accommodative Policy of India-

A) India has maintained high-level engagements despite Maldives’ anti-Indian rhetoric and close ties with China. For ex -India’s Minister of External Affairs has met the Maldivian counterpart on multiple occasions.

B) India replaced 76 military personnel with civilian experts at Maldives’ request.

C) India increased development assistance to the Maldives from ₹400 crore to ₹600 crore for 2024, a 50% rise. India raised export quotas for food products to the Maldives by 5% and construction items by 25%.

D) India emphasized the need to maintain “reciprocal sensitivities” and extended a $50 million treasury bill at zero interest through the State Bank of India.

E) India’s invitation to Mr. Muizzu indicates New Delhi’s commitment to engage with Male irrespective of political changes.

With a strong majority in the Maldivian Parliament, there’s optimism that Mr. Muizzu will reciprocate India’s accommodating approach and consider its concerns.

Question for practice

What are the reasons behind Mr Muizzu’s changed stance toward India?