The Maldives Presses Reset On Ties With India – Analysis

By Rishabh Yadav

Maldivian President Mohammed Muizzu’s first state visit to India comes after a year of strained ties. He ran for president on an ‘India Out’ platform and, after coming to power, broke with the tradition of visiting New Delhi, instead visiting Turkey and, later, China.

Muizzu finally met Indian Prime Minister Narendra Modi on the sidelines of the COP28 conference in December 2023 and visited New Delhi in June 2024 for the swearing-in ceremony of Modi’s third term. Muizzu’s recent visit promises to reset relations between New Delhi and Male, emphasising closer collaboration on development, trade, people-to-people ties and security. But regional geopolitics, domestic sentiment in the Maldives and India’s attitude towards its smaller neighbours may continue to be barriers.

Since the Maldives’ democratic transition in 2008, two major groups — the Maldivian Democratic Party (MDP) and the Progressive Party of Maldives (PPM)–People National Congress (PNC) coalition — have followed different approaches towards India.

MDP governments under Mohammed Nasheed and Ibrahim Solih adopted an India-first approach in which New Delhi was the primary financial and security provider, but Abdulla Yameen’s PPM government intensified economic links with China and joined the Belt and Road Initiative.

Maldives–India ties ruptured when Yameen asked India to remove its gifted helicopter and military personnel in response to New Delhi’s criticism of his crackdown on political opposition. The MDP under Solih recalibrated ties in 2018, with a focus on strengthening security partnerships and infrastructure projects.

Yet Solih’s tenure also witnessed ‘India Out’ protests by the PPM–PNC coalition against New Delhi’s role in a naval dockyard project and broader military presence. The opposition accused the MDP of becoming a ‘slave of India’. Coalition leader Muizzu campaigned on an ‘India Out’ platform, promising to remove Indian military personnel and diversify security relations.

After coming to power, Muizzu insisted India remove its 80 military personnel stationed on the island. Both countries reached a compromise by agreeing to replace the soldiers with civilian technical staff. The Maldives did not participate in the Colombo Security Conclave, a regional security dialogue, while also signing a security agreement with China and allowing a port call for a Chinese research ship.

Relations further plunged after three Maldivian ministers made disparaging remarks against Modi, with matters escalating when Indian social media users called for boycotting the Maldives. Indian tourist arrivals fell from first to fifth position within a month. India also slashed aid to the Maldives by 48 per cent in its 2024 budget.

Yet high-level exchanges between foreign ministers have begun to restore bilateral cooperation and reset ties. Muizzu then publicly denied pursuing an ‘anti-India’ agenda and labelled his approach ‘Maldives first’. India and the Maldives also held a defence dialogue to discuss defence cooperation projects and bilateral military exercises.

India views diversification as limiting its own influence at the cost of China. But for Muizzu, diversification means engaging with different partners rather than subscribing to one, differentiating his coalition from its rival.

Domestic politics demands Muizzu focus on growth. Facing an economic crisis, his recent diplomatic efforts have focused on easing the Maldives’ finances.

The World Bank estimates the country’s public and publicly-guaranteed debt at US$8.2 billion — equivalent to 116 per cent of GDP — in the first quarter of 2024. US$1.37 billion and US$124 million of debt is in loans owed to China and India, respectively. The Maldives’ foreign exchange reserves have dropped to US$440 million, covering only 1.5 months of imports. These economic challenges have forced Muizzu to mend ties with India.

The Maldivian government aims to restructure debt and settle trade in local currencies. It signed a cooperation agreement with Beijing, promoting financing through local currencies. India also stepped up its efforts by offering US$110 million of aid and contributing US$1.4 billion for infrastructure and development projects. India has also offered a currency swap worth over US$750 million.

The decline of Indian tourists is another concern. Tourism is the Maldives’ largest industry, contributing 30 per cent of GDP and generating 60 per cent of foreign currency exchange. As of 22 October, India’s market share had plummeted to 6 per cent, down from 14 per cent in 2023. Muizzu has exhorted Indian tourists to visit the Maldives and highlighted opportunities for public–private partnerships in tourism ventures at the India–Maldives Business Forum.

Muizzu’s policy shift is reflected in a document signed by India and the Maldives, transforming the bilateral relationship into a ‘Comprehensive Economic and Maritime Security Partnership’.

One notable change is intensified exchanges at the ministerial, parliamentary and local governance levels and institutionalising cooperation between national parliaments. This would allow both countries to have open communication channels across political party lines.

This recalibration offers lessons to both countries. Muizzu has realised India’s geographical proximity makes it an indispensable development and security partner. And after regime changes in Bangladesh, Nepal and Sri Lanka, India is learning that investing in a single party or leader is not a prudent approach.

The reset is a strategic gain for New Delhi as China strengthens its regional presence. Muizzu’s readjustment shows the difficulty of decoupling with New Delhi and how peddling anti-India populism subsides once an elected leader faces economic and governance challenges.

Yet India should realise that small states are not without agency and may not view the region from its security lens. New Delhi’s best bet is to show its ability to be a reliable and accommodative partner through institutionalised mechanisms rather than a personalised approach to foreign policy. India should consider that while nationalistic fervour can be an electoral asset, it is a regional strategic liability.

• About the author: Rishabh Yadav is a PhD student at MMAJ Academy of International Studies, Jamia Millia Islamia, New Delhi, where he focusses on the construction of state identity and its relationship with the international order.
• Source: This article was published at East Asia Forum