India Pledged Support to Maldives Amid Economic Issues

Syllabus: GS2/IR

Context

• The foreign minister of Maldives has arrived in India for a three-day visit. It is aimed at bolstering bilateral ties in key areas such as trade and investment.

Maldives & its Significance

• Strategic Importance: The Maldives is strategically located in the Indian Ocean, and its stability and security are of interest to India.
• Trade Route: Situated along crucial maritime trade routes between the Gulf of Aden and the Strait of Malacca, the Maldives acts as a “toll gate” for nearly half of India’s external trade and 80% of its energy imports.

• Counterbalancing China: Maldives presents an opportunity for India to counterbalance China’s growing influence in the Indian Ocean, fostering regional balance of power.

Brief on India – Maldives

• Participation in Multiple Forums: Both nations are founding members of the South Asian Association for Regional Cooperation (SAARC), the South Asian Economic Union and signatories to the South Asia Free Trade Agreement. 
• Economic partnership: India emerged as Maldives’ largest trade partner in 2023.
  • India is one of the biggest investors and tourism markets for the Maldives, with significant trade and infrastructure projects underway. In 2023, India is the leading source market for Maldives with a 11.8% market share. 

• Defense and Security Cooperation: Since 1988, defence and security has been a major area of cooperation between India and Maldives.
  • A comprehensive Action Plan for Defence was also signed in 2016 to consolidate defence partnership.
  • Estimates suggest that almost 70% of Maldives’ defence training is done by India.
• Connectivity: The Male to Thilafushi Link project, popularly known as the Greater Male Connectivity Project (GMCP), is a USD 530 million infrastructure project.
  • The project aims to connect Male to Villingili, Gulhifalhu and Thilafushi islands through a series of bridges, causeways and roads. 
  • The project is crucial for the proposed Gulhifalhu Port, and will be a major catalyst for the Maldivian economy.

Challenges in Relations

• Domestic turmoil in the Maldives: Recent political upheavals and changes in government create uncertainty and complicate long-term cooperation projects.
• Chinese Influence: China’s growing economic presence in the Maldives, evidenced by investments in infrastructure projects and debt-trap diplomacy, is perceived as a challenge to India’s strategic interests in the region.
• Non-traditional threats: Piracy, terrorism, and drug trafficking remain concerns in the region, requiring continuous collaboration and intelligence sharing between India and the Maldives.
• Trade imbalance: The significant trade imbalance between India and the Maldives leads to resentment and calls for diversifying trade partnerships.

Way Ahead

• The evolution of India-Maldives relations reflects a combination of geopolitical dynamics, changes in leadership, and shared regional interests. 
• India is steadfast in its commitments towards Maldives and has always walked the extra mile towards building relations. 
• By acknowledging and addressing the challenges, India and the Maldives can navigate the complexities of their relationship and build a stronger, more resilient, and mutually beneficial partnership for the future.

Source: HT