About Maldives
- Maldives is an island nation that is located south of Lakshadweep (Indian territory). Both nations share common cultural links like the practice of Islam.
Areas of Cooperation
- Historical Connection
- Pre-Independence – Both India and Maldives have been British colonies since 1880.
- Post-Independence – India was the first to recognise Maldives as an independent nation since 1965 and established diplomatic relations in 1972.
- Political Relations
- India and Maldives share common platforms like SAARC, SASEC, IORA, Indian Ocean Navall Symposium.
- Economic Relation
- A trade agreement was signed between India and Maldives in 1981.
- India is Maldives’ 4th largest trade partner.
- India climbed from the fourth position in 2018 to become Maldives’ second-largest trading partner, with bilateral trade in 2021 experiencing a 31% growth despite pandemic obstacles.
- India‐Maldives bilateral trade in 2021 stands at US$ 323.9 million with the trade balance in favour of India.
- In order to assist Maldives in its economic recovery, India provided financial assistance of US$ 250 million to Maldives in September 2020
- Currency Swap: A Bilateral US Dollar Currency Swap Agreement of $400 million was signed between RBI and Maldives Monetary Authority (MMA) in 2019.
- Defence Relations
- India offers the highest number of training opportunities for the Maldivian National Defence Force (MNDF), fulfilling approximately 70% of their defence training needs.
- In April 2016, a comprehensive Action Plan for Defence was signed to strengthen the defence partnership.
- Noteworthy initiatives in the defence sector include the establishment of the Composite Training Centre for MNDF, the implementation of the Coastal Radar Surveillance System, and the construction of the new Ministry of Defence Headquarters.
- Provided advanced Light Helicopters.
- Historical Assistance
- Operation Cactus 1988: Under Operation Cactus the Indian Armed Forces have helped the government of Maldives in the neutralization of the coup attempt.
- Joint Exercise – Ekuverin
- Development Cooperation
- Developmental Cooperation: India has implemented notable development projects in the Maldives, such as the Indira Gandhi Memorial Hospital, Maldives Institute of Technical Education, and the National College for Policing and Law Enforcement (NCPLE).
- Connectivity Project: India has also provided US $500 million in assistance for the Greater Male Connectivity Project (GMCP), the largest civilian infrastructure project in Maldives, to connect Male to three neighbouring islands.
- Covid Assistance
- A 14-member Rapid Response Medical team was deployed in the Maldives in March 2020 to guide and train the Maldivian authorities and personnel in tackling the Corona threat.
- Operation Sanjeevani: As part of GoI’s efforts to help friendly countries tackle the COVID-19 threat, a special IAF plane airlifted 6.2 tonnes of essential medical supplies from India to Maldives on 2 April 2020.
- Cultural Relations
- As part of medical tourism Maldives mainly depend on India for critical treatment at lower cost.
- In 2018, India was the 5th largest source of tourist arrival in Maldives.
- Indians second largest community in Maldives as expatriates as teachers and doctors.
- Common religion – Islam
- Order of Distinguish Rule of Nishan Izzuddeen conferred on Indian Prime Minister.
Significance of Maldives for India
- Countering Radicalization: More than 200 Maldivian youths have joined ISIS. Growing radicalization due to political instability and socio-economic uncertainty can give the opportunity for Pakistan to establish terror launch pads in Maldives.
- Rising Chinese footprint: Maldives is an important part of China’s string of pearls strategy of Containing India. China’s policy of Debt Trap Diplomacy can give it access to strategic real estate in Maldives. China-Maldives Friendship Bridge, funded by Beijing with $200 million, is one of several projects of China in the tropical South Asian nation renowned for its beautiful beaches and lagoons.
- Economic: Trade and commercial exchanges between India and Maldives have stagnated and need to match their potential. COVID-19 will hurt Maldives’ economy and push it deeper into China’s debt trap.
- Political Instability: India has expressed significant concern regarding the effect of political instability in the region on its security and development.
Issues in Relation
- Domestic Political Grievances: Democratic institutions have experienced a decline in strength, leaving them vulnerable. Furthermore, if not governed effectively, fragile democracies may become susceptible to radical ideologies.
- Hub of Terrorism: The rise of Islamist radicalism in the island nation of Maldives is primarily fueled by political instability and socio-economic challenges. Additionally, there is concern that Saudi Arabia has played a role in the radicalization of Maldives. In fact, Maldives has recorded one of the highest per capita numbers of ISIS terrorists.
- China’s Influence in the Maldives: India is growing increasingly concerned about China’s expanding influence in the Maldives, largely driven by numerous investment projects led by Beijing. The Maldives has now become a significant component of China’s strategic “String of Pearls” initiative in South Asia.
- Economical: The bilateral trade between Maldives and India is currently at a very low level, and the two countries do not have a Free Trade Agreement (FTA) in place.
- Anti-Indian Sentiments: The current President of Maldives is against Indian influence on the Maldives and demands the removal of Indian troops from their nation and support China by allowing the spy ship to dock.
- Lack of Transparency: There is frequent concern expressed about the lack of transparency surrounding the agreements being signed between the Solih government and India.
- Misunderstanding of India’s Efforts: There have been speculations suggesting that the UTF Harbour Project agreement between India and the Maldives, which aims to develop a coastguard harbour at Uthuru Thila Falhu, might potentially be converted into an Indian naval base