Rebuilding Bridges: The Restoration of India-Maldives Relations

The relationship between neighbouring nations often resembles a delicate dance, swayed by the winds of political change, cultural ties, and strategic needs. The India-Maldives relationship is one such example, where a stormy phase appears to have given way to calm seas, marked by a recent diplomatic reset that has brought the two nations back on course.

After a period of strain, where sharp words were exchanged and diplomatic ties frayed, the relationship between India and the Maldives is on the mend. A former high-ranking officer, reflecting on the historical ties and mutual needs between the two nations, once remarked, “Just wait and watch; the relationship will restore to its original ethos, as it has always been.” These words have proven prophetic, as the Maldives, under the leadership of President Mohamed Muizzu, is once again embracing its long-standing partnership with India, signalling a return to normalcy.

 From “India Out” to Diplomatic Engagement

The Maldives’ relationship with India took a downturn when Muizzu, then a presidential candidate, rode a wave of anti-India sentiment, encapsulated in the “India Out” campaign. This campaign was marked by strong rhetoric against Indian presence and influence in the Maldives, particularly targeting the Indian military personnel stationed in the archipelago. The campaign resonated with a segment of the Maldivian population, leading to a tense atmosphere between the two nations.

However, political campaigns often give way to the realities of governance, and President Muizzu’s actions since taking office suggest a recognition of the indispensable role India plays in the Maldives’ stability and development. Muizzu has sought to rebuild bridges with New Delhi, with plans to visit India in September, signalling his administration’s intent to strengthen ties and foster economic collaboration.

Minister of External Affairs, Dr Subrahmanyam Jaishankar, played a pivotal role in this diplomatic reset. His recent visit to the Maldives, described as highly successful, was a testament to India’s commitment to deepening bilateral relations. Jaishankar was received warmly in the Maldives, where he met with President Muizzu and other key officials, signing several Memorandums of Understanding (MoUs) that paved the way for renewed cooperation in areas such as infrastructure, health, and education.

 The Strategic Shift: India’s Diplomatic Patience

One of the most remarkable aspects of India’s approach during the period of strained relations was its strategic patience. Despite the provocative rhetoric and the expulsion of Indian troops from the Maldives earlier this year, India refrained from retaliating with economic sanctions or other punitive measures. Instead, India chose to wait and watch, confident in the resilience of the bilateral relationship. Time and again, Indian officials emphasized that they did not hold a grudge against the Maldives, valuing the people-to-people relationship over political disputes.

This approach has paid dividends. The Maldives, recognizing the risks of jeopardizing a long-standing and beneficial partnership, has gradually adopted a more accommodating stance towards India. The Maldivian government’s recent actions reflect an understanding that the country’s strategic and economic interests are closely tied to its relationship with India.

Foreign Minister Moosa Zameer’s visit to New Delhi earlier this year was a key moment in this diplomatic reset. During his visit, Zameer and Jaishankar discussed ongoing Indian-backed projects in the Maldives, which have been instrumental in the country’s development. This visit laid the groundwork for Jaishankar’s recent trip to the Maldives, which has been hailed as a success by both governments.

 Tourism and Debt Concerns

The period of strained relations between India and the Maldives had significant economic implications, particularly in the tourism sector, which is a cornerstone of the Maldivian economy. India was the top source of inbound tourists to the Maldives in 2023, contributing around 12% of total visitors. However, as relations soured, this figure dropped to 5 % by August 2024, with China overtaking India as the top source of tourists.

The decline in Indian tourists was further exacerbated by calls for a boycott of Maldivian tourism following derogatory comments made by Maldivian ministers about Prime Minister Narendra Modi. These remarks, which targeted Modi’s promotion of domestic tourism in the Lakshadweep archipelago, sparked a backlash in India, leading to a significant drop in Indian visitors to the Maldives.

The impact of this decline was felt across the Maldivian economy. The tourism sector, which is heavily reliant on Indian visitors, suffered a sharp downturn, leading to pressure from the business community on the Maldivian government to mend ties with India. Indian celebrities and Bollywood stars, who frequently visited the Maldives’ luxury resorts, also curtailed their trips, contributing to the slump in tourism revenue.

Analysts estimate that India contributed around $400 million to the Maldivian tourism industry last year. The continued decline in Indian tourists posed a serious threat to the Maldivian economy, which is heavily dependent on tourism revenue. This economic reality likely played one of the significant roles in the Maldivian government’s decision to pursue a diplomatic reset with India.

 The Role of Soft Power and Cultural Diplomacy

India’s influence in the Maldives extends beyond politics and economics, encompassing cultural, educational, and people-to-people exchanges that have fostered a deep sense of goodwill between the two populations.

Bollywood, for instance, has long been a cultural bridge between India and the Maldives. Indian films are immensely popular in the Maldives, and many Maldivians are avid followers of Bollywood stars. The influence of Indian cinema has not only shaped cultural perceptions but has also contributed to the Maldives’ tourism industry, with Bollywood celebrities frequently visiting the islands. The recent dip in these visits, due to strained relations, highlighted the extent to which cultural ties are intertwined with diplomatic relations.

Additionally, India has been a key partner in the Maldives’ education sector, offering scholarships and training programs for Maldivian students. Thousands of Maldivian students have studied in India, forging personal and professional connections that have strengthened bilateral ties. These educational exchanges have created a network of Maldivian professionals with strong ties to India, serving as informal ambassadors of goodwill.

During the period of diplomatic strain, these cultural and educational ties were put to the test. However, the resilience of these connections, built over decades, helped prevent a complete breakdown in relations. These soft power elements are playing a crucial role in rebuilding trust and cooperation.

 Maritime Security

The shifting balance in the Maldives’ foreign relations has significant implications for regional security dynamics, particularly in the maritime domain. The Maldives’ strategic location in the Indian Ocean makes it a key player in ensuring maritime security in the region, an area of increasing concern as China endeavours to enhance its geopolitical footprint. For India, the importance of the Maldives lies in its strategic location, which is crucial to New Delhi’s “neighbourhood first” policy. This has become increasingly important as China strengthens its ties with India’s neighbours, sparking concerns in Delhi.

After winning the elections in the Maldives last November, President Muizzu showed a clear tilt in favour of Beijing, choosing to visit China first and signing several maritime, marine, security, and defence cooperation agreements. This move raised alarm bells in New Delhi, particularly given the Maldives’ geographic proximity to India and the vital economic ties between Malé and Delhi. While the Maldives has expressed a desire to follow a “Pro-Maldivian” strategy, avoiding close alignment with either India or China, this stance may prove politically and economically challenging to maintain.

India has long been a close ally of the Maldives, providing security cooperation, financial and development assistance, and support for good governance. However, since the Maldives joined China’s Belt and Road Initiative in 2014, China has become the largest investor in the country, funding infrastructure projects including bridges, airports, and housing developments.

 Economic Woes: Debt and Fiscal Instability

The economic fallout of strained relations with India is compounded by the Maldives’ growing debt, particularly to Chinese lenders. Over the past decade, media reported quoting official sources that the Maldives has borrowed approximately $1.5 billion from Chinese sources, making up 20 per cent of its public debt. As repayment deadlines loom, concerns about the Maldives’ ability to service this debt have grown. In May, the IMF flagged the need for immediate policy adjustments to safeguard macroeconomic stability, restore debt sustainability, and support sustained growth. The World Bank has similarly raised alarms about the Maldives’ fiscal situation, warning of a vulnerable fiscal position and unsustainable debt levels.

Maldivians have watched the financial and economic collapse of neighbouring Sri Lanka with deep concern, aware that poor governance and heavy indebtedness could lead to a similar crisis in their own country. Despite this, China has announced only a minimal debt write-off, while India has extended budgetary support and increased export quotas for essential commodities.

The shifting balance in the Maldives’ foreign relations also poses risks to regional security. The Maldives government’s decision to review its defence cooperation agreement with India creates uncertainty about the future of joint patrols and maritime domain awareness initiatives. In contrast, China has proposed enhanced maritime security cooperation, including joint naval exercises and the potential establishment of a maritime research station in the Maldives. These proposals are part of China’s broader strategy to establish a permanent presence in the Indian Ocean, and Maldives, a move that could disrupt the delicate balance of power in the region.

 Navigating a Complex Geopolitical Landscape

The recent diplomatic reset with India suggests that Malé recognizes the importance of maintaining strong ties with its closest neighbour. The journey to reconciliation in less than a year in itself is a remarkable achievement however, it has been fraught with complexities, involving internal Maldivian politics, economic fallout in the country, decreased tourism, maritime security concerns, and the influence of global powers like China.

The restoration of India-Maldives relations is a positive step forward, but the path ahead is fraught with challenges. Both India and Maldives must navigate these turbulent waters with caution, ensuring that their foreign policy decisions do not compromise their long-term stability and prosperity. For India, the relationship with the Maldives remains a critical component of its regional strategy and cultural ties, one that will require ongoing engagement and support to ensure that the bonds of friendship remain strong. Meanwhile, Maldives need to have a clear-eyed assessment, while safeguarding its sovereignty, security and economic stability.

Surinder Singh Oberoi, National Editor Greater Kashmir