India-Maldives Relations: Navigating Shifting Tides Amid Geopolitical Currents

X: @vivekbhavsar

The Indian Ocean, a vital maritime expanse, has long been an arena for geopolitical maneuvering, with nations like India and China vying for influence. At the heart of this strategic contest lies the Maldives, a small island nation whose significance far exceeds its size. Historically, India has been the Maldives’ closest partner, but recent developments suggest a nuanced shift in this dynamic.

President Mohamed Muizzu’s administration, which assumed office in November 2023, has introduced policies that reflect a recalibration of the Maldives’ foreign relations, balancing ties with both New Delhi and Beijing. This evolution raises critical questions about the future of India-Maldives relations and the broader implications for regional security and economic cooperation.

India and the Maldives share deep-rooted ties, anchored in history, culture, trade, and security cooperation. India was among the first nations to recognise the Maldives after its independence in 1965, laying the foundation for a robust bilateral relationship.

In 1988, India launched Operation Cactus, a decisive military intervention that successfully thwarted a coup attempt against then-President Maumoon Abdul Gayoom, solidifying India’s role as a reliable security partner.

India has consistently been the Maldives’ first responder in times of crisis, including during the 2004 tsunami and the COVID-19 pandemic. Development assistance, educational scholarships, medical aid, and trade agreements have further cemented ties.

However, the relationship has experienced fluctuations, influenced by the Maldives’ internal political shifts and external engagements, notably with China.

Under President Mohamed Muizzu, the Maldives has witnessed a recalibration of its foreign policy. The Muizzu administration requested the replacement of Indian military personnel operating three aviation platforms in the Maldives with civilian staff, reflecting a nuanced approach to foreign military presence.

The Maldives has sought to deepen economic cooperation with China, engaging in discussions to bolster infrastructure development and economic ties.

Diplomatic tensions arose due to derogatory remarks about Indian tourists and Prime Minister Narendra Modi by Maldivian officials and influencers, leading to a boycott campaign by Indian travelers. This had a tangible impact on the Maldives’ tourism industry, which heavily depends on Indian visitors.

Despite recent challenges, both nations have undertaken efforts to reinforce their longstanding partnership.

In October 2024, Maldivian President Mohamed Muizzu undertook his first state visit to New Delhi, marking a significant step in mending previously strained relations. During this visit, President Muizzu referred to India as a “valued partner,” signaling a commitment to bolster bilateral ties. The discussions culminated in the signing of a comprehensive economic and maritime security partnership, reflecting a mutual dedication to enhancing cooperation across various sectors.

To support the Maldivian economy, India extended substantial financial assistance, including a $100 million subscription to Maldivian Treasury bills and a ₹3,000 crore currency swap arrangement. These measures aim to stabilise the Maldivian economy and manage its debt distress. Additionally, both nations have announced new joint infrastructure projects and are exploring a Free Trade Agreement (FTA), underscoring the deepening economic interdependence between the two countries.

Defence cooperation remains a cornerstone of India-Maldives relations. In 2024, India extended a $50 million line of credit to the Maldives for defence projects, primarily for the development and maintenance of the Uthuru Thila Falhu (UTF) Naval Base. This initiative aims to enhance the Maldives’ maritime security capabilities, reflecting a shared commitment to ensuring stability in the Indian Ocean region.

The Maldives has been grappling with a severe economic crisis, exacerbated by high public debt and dwindling foreign reserves. In October 2024, the Maldivian government appointed Centerview Partners as debt advisers to navigate the financial crunch and explore restructuring options. India has been closely monitoring the situation, offering financial support to help stabilize the Maldivian economy.

Maldivian Foreign Minister Dr. Abdulla Khaleel visited New Delhi, engaging in bilateral discussions with India’s External Affairs Minister Dr. S. Jaishankar. Both ministers reviewed progress on agreements established during President Muizzu’s state visit, underscoring a mutual commitment to strengthening bilateral relations.

A key outcome of the talks was the signing of an agreement to implement the next phase of High Impact Community Development Projects (HICDP) in the Maldives, aimed at enhancing socio-economic development at the grassroots level.

The evolving dynamics in the Maldives’ foreign policy present several considerations for India. The Maldives’ strategic location along key shipping lanes is crucial for India’s maritime security. Any shift in the Maldives’ foreign policy could influence the security architecture of the Indian Ocean region.

India has been a major contributor to the Maldives’ infrastructure projects, health sector, and education system. A reorientation in the Maldives’ foreign relations could impact India’s economic engagement and investment opportunities.

To navigate the evolving dynamics, India could consider the following approaches: Continuing to offer economic assistance and infrastructure support that directly benefits the Maldivian populace can strengthen bilateral ties. Initiatives such as the Maldives National Defence Force (MNDF) ‘Ekatha’ harbour project at Uthuru Thila Falhu (UTF), with India’s assistance, are pivotal in augmenting the Maldives’ operational capabilities.

Strengthening ties with other regional actors, such as Sri Lanka, Mauritius, and Seychelles, can contribute to a robust Indian Ocean security network, balancing external influences.

Given that India was the largest source market for Maldivian tourism until 2023, promoting people-to-people ties through cultural exchanges and educational programs can foster goodwill.

Recognising the Maldives’ history of political shifts, India should remain engaged without reacting impulsively, as political tides may shift in the future.

India-Maldives relations are at a pivotal juncture. While the current Maldivian administration seeks to balance its foreign relations, India, as a longstanding partner, must navigate this phase with strategic patience and sustained engagement. The Indian Ocean remains a contested geopolitical space, and how New Delhi manages its relations with Malé in the coming years will be crucial in determining its broader influence in the region.

By remaining a reliable and non-intrusive partner, India can ensure that its engagement with the Maldives prioritizes long-term strategic and economic cooperation over short-term political fluctuatinns.