Despite asymmetries in terms of territorial size, resources, and economy between them, India and the Maldives acknowledge the strategic importance they hold for each other
India's crucial role in the Maldives' strategic landscape has been well-articulated on numerous occasions, with India serving as the primary security provider.
Instances such as India's prompt assistance during the 1988 coup attempt, the 2004 Tsunami, and the 2014 water crisis have further solidified mutual trust and strengthened the foundation of friendly bilateral relations.
Similarly, the Maldives has consistently emphasized its policy of 'India First,’ signifying a trusted partnership and highlighting its role as a friendly neighbour to India, given its strategic location on India's West Coast.
This commitment was reaffirmed during the visit of Maldives Foreign Minister Abdulla Shahid to India in July 2023.
In an interview with India Today, Shahid expressed, “India has long been a time-tested friend and has played a significant role in the Indian Ocean region. It has consistently been the first responder whenever the Maldives has faced any crisis.”
Historical context
As all-weather friends, India, and the Maldives share deep ethnic, linguistic, cultural, religious, and economic linkages. Their formal diplomatic and bilateral relations date back to 1965 when India was among the first countries to recognise the Maldives as an independent and sovereign nation after it gained Independence from British rule.
There have been frequent interactions between the people of both regions, fostering cultural and economic exchanges through trade and maritime activities.
As a newly independent country, the Maldives, like other Indian neighbours, also received extensive material, monetary, and technical aid from India to support the consolidation of democracy and foster rapid economic growth.
The frequent high-level political visits since 1990 reflect mutual trust, friendship, understanding, and dependence on each other. There have been 36 high-level political visits undertaken from the Maldives to India since 1990.
Similarly, there have been 22 high-level political delegations from India to the Maldives during the same period. These visits have helped to set up a multifaceted robust bilateral institutional mechanism for mutual benefits.
For example, under the ‘India First’ policy, after assuming office, President Ibrahim Mohamed Solih paid a state visit to India in December 2018.
Earlier, Prime Minister Narendra Modi attended the inauguration ceremony of President Solih on 17 November 2018. Again, as part of India's “neighborhood first” policy, Prime Minister Modi undertook the first official visit to the Maldives in June 2019 after assuming office for the second time.
Components of development partnership
India is the largest development partner of the Maldives, having supported a substantial number of community development and infrastructure projects since 1990.
India's development assistance to the Maldives can be broadly divided into two categories: large and high-impact community development projects.
These initiatives encompass hospitals, educational institutions, training facilities for security forces, water and sanitation systems, roads and land reclamation projects, stadiums, and social housing initiatives.
As per Indian High Commission in Male, a total of 47 India assisted High Impact Community Development Projects are underway and out of them, as many as 7 have been completed and inaugurated.
Some of the significant community development projects completed with Indian grant assistance are listed below:
1. Indira Gandhi Memorial Hospital, built in 1995.
2. Maldives Polytechnic, completed in 1996.
3. Technology Adoption Programme in the Education Sector in the Maldives, concluded in 2013.
4. India-Maldives Faculty of Hospitality and Tourism Studies, operationalised in 2014.
5. In March 2019, India announced a cash grant of INR 50 crores to the Maldives
for several socio-economic development projects, all of which have been completed.
Moreover, during the post-COVID-19 period, India extended financial assistance of US$250 million to the Maldives in the form of budgetary support to help overcome the challenging economic situation. This assistance reaffirms India's commitment to fostering strong ties with the Maldives and supporting its development endeavors.
Large projects
Other than HICDPs, India has been providing crucial support for the development of major infrastructure projects in the Maldives. Notably, Indian grant assistance has been instrumental in the restoration of the historic Hukuru Miskiiy (Friday Mosque) in Male and the establishment of the National College for Police and Law Enforcement, which was inaugurated in March 2022.
In addition to these initiatives, several other significant projects have been undertaken through the Exim Bank Line of Credit. In March 2019, a US$900 million agreement was signed between the Maldives and the Exim Bank of India, paving the way for the following key projects:
1. Addu development project
2. Water and Sanitation in 34 Islands
3. Expansion of Maldives Industrial Fisheries Company Limited
4. Cancer Hospital
5. Gulhifalhu Port Project
6. Hulhumale cricket stadium
7. Airport redevelopment projects in Hanimaadhoo and Gan
8. Greater male connectivity project
Apart from infrastructure projects, India has also offered a US$50 million defense line of credit and a US$40 million sports line of credit to the Maldives. Furthermore, under the arrangement of Exim Bank's buyers' credit, three more infrastructure projects are currently being developed separately.
Economic and trade relations
India holds the position of the 3rd largest trade partner of the Maldives, and this status is poised to improve further due to recent developments. Notably, direct cargo vessel services have been operational since 2020.
Additionally, the implementation of visa-free entry for Indians for business purposes in 2022 and the signing of an MoU on duty-free tuna export to India in the same year have strengthened trade ties.
In December 2022, the Reserve Bank of India and the Maldives Monetary Authority signed a Currency Swap Agreement under the SAARC Currency Swap Framework, allowing the Maldivian Monetary Authority to access up to US$200 million from the RBI on multiple occasions.
These initiatives enhance the commercial partnership between India and the Maldives, promising a positive trajectory for their trade relations.
Furthermore, India is the largest investor in the Maldives, with major Indian private companies such as the Tata Group, GMR Group, Shriram Group, Bommidala, and Suzlon making significant investments in the country.
The GMR Group's efforts in modernizing the international airport in Male with a total cost of US$511 million are noteworthy, while the Tata Group primarily operates in the services sector.
In addition to private companies, Indian banks, especially the State Bank of India, have also contributed to the Maldives' economy by extending credits to various sectors, including housing, infrastructure, resorts, trade and commercial activities, and hotels.
It is essential to acknowledge that India has been among the top five contributors to the total tourist arrivals in the Maldives, further highlighting the strong people-to-people ties between the two nations.
Capacity building
Human resources play a pivotal role in driving the economic growth of a country, and India has been making substantial contributions to the development of human capital in the Maldives.
As a major partner in this endeavor, India has been instrumental in providing educational opportunities to a large number of Maldivian students. Given the limited opportunities in the Maldives, many students pursue their higher education in Indian universities.
Furthermore, India has been actively involved in strengthening the education system by deploying a considerable number of trained teachers from India to teach in Maldivian schools.
To support the educational aspirations of the Maldivian students, India offers a significant number of scholarships. Since 2012-13, over 165 Maldivian students have benefitted from the ICCR scholarship program.
Additionally, India extends 10 scholarships annually as part of the India Science and Research Fellowship. The partnership between India and the Maldives also extends to capacity-building programs. The Indian Technical and Economic Cooperation program has been a longstanding collaboration, and in the year 2019-20, the number of in-person slots increased to 200.
These specially structured programs aim to enhance the skills and capabilities of in-service government employees in various departments of the Maldives.
India further provides separate training programs for the Maldivian National Defence Force, emphasising the comprehensive nature of the bilateral cooperation.
Conclusion
The India-Maldives relationship goes beyond development and economic sectors. Since 1965, India has been a vocal supporter of multiparty democracy in the Maldives. Notably, India played a pivotal role in the restoration of democracy in 2018 when former President Abdulla Yameen undermined democratic values and ethos with the support of China between 2008 and 2018.
India's unwavering support to the Maldives in various fields demonstrates its strong commitment to fostering a stronger partnership with Male.
As the Maldives prepares for another Presidential election by September 2023, India hopes for the triumph of democracy and aims to nurture a long-lasting and meaningful partnership in the future.
**The writer is a Research Fellow at the MP-IDSA, New Delhi; views expressed are personal.
Instances such as India's prompt assistance during the 1988 coup attempt, the 2004 Tsunami, and the 2014 water crisis have further solidified mutual trust and strengthened the foundation of friendly bilateral relations.
Similarly, the Maldives has consistently emphasized its policy of 'India First,’ signifying a trusted partnership and highlighting its role as a friendly neighbour to India, given its strategic location on India's West Coast.
This commitment was reaffirmed during the visit of Maldives Foreign Minister Abdulla Shahid to India in July 2023.
In an interview with India Today, Shahid expressed, “India has long been a time-tested friend and has played a significant role in the Indian Ocean region. It has consistently been the first responder whenever the Maldives has faced any crisis.”
Historical context
As all-weather friends, India, and the Maldives share deep ethnic, linguistic, cultural, religious, and economic linkages. Their formal diplomatic and bilateral relations date back to 1965 when India was among the first countries to recognise the Maldives as an independent and sovereign nation after it gained Independence from British rule.
There have been frequent interactions between the people of both regions, fostering cultural and economic exchanges through trade and maritime activities.
As a newly independent country, the Maldives, like other Indian neighbours, also received extensive material, monetary, and technical aid from India to support the consolidation of democracy and foster rapid economic growth.
The frequent high-level political visits since 1990 reflect mutual trust, friendship, understanding, and dependence on each other. There have been 36 high-level political visits undertaken from the Maldives to India since 1990.
Similarly, there have been 22 high-level political delegations from India to the Maldives during the same period. These visits have helped to set up a multifaceted robust bilateral institutional mechanism for mutual benefits.
For example, under the ‘India First’ policy, after assuming office, President Ibrahim Mohamed Solih paid a state visit to India in December 2018.
Earlier, Prime Minister Narendra Modi attended the inauguration ceremony of President Solih on 17 November 2018. Again, as part of India's “neighborhood first” policy, Prime Minister Modi undertook the first official visit to the Maldives in June 2019 after assuming office for the second time.
Components of development partnership
India is the largest development partner of the Maldives, having supported a substantial number of community development and infrastructure projects since 1990.
India's development assistance to the Maldives can be broadly divided into two categories: large and high-impact community development projects.
These initiatives encompass hospitals, educational institutions, training facilities for security forces, water and sanitation systems, roads and land reclamation projects, stadiums, and social housing initiatives.
As per Indian High Commission in Male, a total of 47 India assisted High Impact Community Development Projects are underway and out of them, as many as 7 have been completed and inaugurated.
Some of the significant community development projects completed with Indian grant assistance are listed below:
1. Indira Gandhi Memorial Hospital, built in 1995.
2. Maldives Polytechnic, completed in 1996.
3. Technology Adoption Programme in the Education Sector in the Maldives, concluded in 2013.
4. India-Maldives Faculty of Hospitality and Tourism Studies, operationalised in 2014.
5. In March 2019, India announced a cash grant of INR 50 crores to the Maldives
for several socio-economic development projects, all of which have been completed.
Moreover, during the post-COVID-19 period, India extended financial assistance of US$250 million to the Maldives in the form of budgetary support to help overcome the challenging economic situation. This assistance reaffirms India's commitment to fostering strong ties with the Maldives and supporting its development endeavors.
Large projects
Other than HICDPs, India has been providing crucial support for the development of major infrastructure projects in the Maldives. Notably, Indian grant assistance has been instrumental in the restoration of the historic Hukuru Miskiiy (Friday Mosque) in Male and the establishment of the National College for Police and Law Enforcement, which was inaugurated in March 2022.
In addition to these initiatives, several other significant projects have been undertaken through the Exim Bank Line of Credit. In March 2019, a US$900 million agreement was signed between the Maldives and the Exim Bank of India, paving the way for the following key projects:
1. Addu development project
2. Water and Sanitation in 34 Islands
3. Expansion of Maldives Industrial Fisheries Company Limited
4. Cancer Hospital
5. Gulhifalhu Port Project
6. Hulhumale cricket stadium
7. Airport redevelopment projects in Hanimaadhoo and Gan
8. Greater male connectivity project
Apart from infrastructure projects, India has also offered a US$50 million defense line of credit and a US$40 million sports line of credit to the Maldives. Furthermore, under the arrangement of Exim Bank's buyers' credit, three more infrastructure projects are currently being developed separately.
Economic and trade relations
India holds the position of the 3rd largest trade partner of the Maldives, and this status is poised to improve further due to recent developments. Notably, direct cargo vessel services have been operational since 2020.
Additionally, the implementation of visa-free entry for Indians for business purposes in 2022 and the signing of an MoU on duty-free tuna export to India in the same year have strengthened trade ties.
In December 2022, the Reserve Bank of India and the Maldives Monetary Authority signed a Currency Swap Agreement under the SAARC Currency Swap Framework, allowing the Maldivian Monetary Authority to access up to US$200 million from the RBI on multiple occasions.
These initiatives enhance the commercial partnership between India and the Maldives, promising a positive trajectory for their trade relations.
Furthermore, India is the largest investor in the Maldives, with major Indian private companies such as the Tata Group, GMR Group, Shriram Group, Bommidala, and Suzlon making significant investments in the country.
The GMR Group's efforts in modernizing the international airport in Male with a total cost of US$511 million are noteworthy, while the Tata Group primarily operates in the services sector.
In addition to private companies, Indian banks, especially the State Bank of India, have also contributed to the Maldives' economy by extending credits to various sectors, including housing, infrastructure, resorts, trade and commercial activities, and hotels.
It is essential to acknowledge that India has been among the top five contributors to the total tourist arrivals in the Maldives, further highlighting the strong people-to-people ties between the two nations.
Capacity building
Human resources play a pivotal role in driving the economic growth of a country, and India has been making substantial contributions to the development of human capital in the Maldives.
As a major partner in this endeavor, India has been instrumental in providing educational opportunities to a large number of Maldivian students. Given the limited opportunities in the Maldives, many students pursue their higher education in Indian universities.
Furthermore, India has been actively involved in strengthening the education system by deploying a considerable number of trained teachers from India to teach in Maldivian schools.
To support the educational aspirations of the Maldivian students, India offers a significant number of scholarships. Since 2012-13, over 165 Maldivian students have benefitted from the ICCR scholarship program.
Additionally, India extends 10 scholarships annually as part of the India Science and Research Fellowship. The partnership between India and the Maldives also extends to capacity-building programs. The Indian Technical and Economic Cooperation program has been a longstanding collaboration, and in the year 2019-20, the number of in-person slots increased to 200.
These specially structured programs aim to enhance the skills and capabilities of in-service government employees in various departments of the Maldives.
India further provides separate training programs for the Maldivian National Defence Force, emphasising the comprehensive nature of the bilateral cooperation.
Conclusion
The India-Maldives relationship goes beyond development and economic sectors. Since 1965, India has been a vocal supporter of multiparty democracy in the Maldives. Notably, India played a pivotal role in the restoration of democracy in 2018 when former President Abdulla Yameen undermined democratic values and ethos with the support of China between 2008 and 2018.
India's unwavering support to the Maldives in various fields demonstrates its strong commitment to fostering a stronger partnership with Male.
As the Maldives prepares for another Presidential election by September 2023, India hopes for the triumph of democracy and aims to nurture a long-lasting and meaningful partnership in the future.
**The writer is a Research Fellow at the MP-IDSA, New Delhi; views expressed are personal.
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