Maldives’ President State Visit to India: A New Era of Cooperation (GS Paper 2, IR)
Introduction
- Maldives President Mohamed Muizzu's recent four-day state visit to India marks a pivotal moment in bilateral relations, signifying a shift from prior tensions to a renewed commitment to cooperation.
- This transition is particularly notable given President Muizzu's previous administration, which often capitalized on anti-India sentiments.
- As the Maldives faces significant economic challenges, the visit underscores India’s crucial role as a partner in addressing these issues and stabilizing the region.
Key Outcomes of the Visit
Strengthening Bilateral Relations
- India reaffirmed its commitment to the Maldives through its Neighbourhood First policy and the SAGAR (Security and Growth for All in the Region) vision.
- This reinforces the importance of strong ties in promoting mutual prosperity and security.
Emergency Financial Assistance
To support the Maldives in its current economic crisis, India extended immediate financial aid:
- Treasury Bills: India provided USD 100 million in Treasury bills to address urgent financing needs.
- Bilateral Currency Swap Agreement: An additional USD 400 million and Rs 30 billion currency swap agreement was established, aiding in managing foreign exchange liquidity.
Comprehensive Economic and Maritime Security Partnership
The two countries agreed to evolve their relationship into a Comprehensive Economic and Maritime Security Partnership. This framework aims to:
- Be people-centric and future-oriented.
- Serve as an anchor for stability in the Indian Ocean Region (IOR), focusing on security and economic growth.
Development Cooperation
Key development projects were prioritized, including:
- The Greater Male Connectivity Project (GMCP), enhancing transport infrastructure.
- Feasibility studies for connecting Thilafushi and Giraavaru islands.
- Collaborating on a commercial port at Thilafushi, which is expected to boost transshipment and bunkering services.
Trade Agreements
Discussions on a bilateral free trade agreement were initiated. This includes:
- Local currency trade settlements.
- Investment promotion strategies.
- Diversification of the economy and boosting tourism, which is vital for the Maldives’ financial recovery.
Digital and Financial Cooperation
The visit saw agreements on advancing digital infrastructure:
- Launching India's Unified Payments Interface (UPI) in the Maldives to streamline transactions.
- Establishing Jan Aushadhi Kendras to supply affordable generic medicines.
Energy and Health Collaboration
Cooperation on renewable energy and healthcare was a significant focus:
- Joint initiatives on renewable energy projects aimed at helping the Maldives meet climate goals.
- Collaboration on mental health services, drug de-addiction programs, and capacity building for emergency medical evacuations.
Defence and Security Initiatives
Strengthening defence ties was emphasized through:
- Completing the Maldives National Defence Force (MNDF) 'Ekatha' harbour project, which is crucial for enhancing the MNDF's operational capabilities.
Capacity Building
- A Start-up Incubator-Accelerator will be established to promote youth innovation and entrepreneurship, fostering economic resilience and job creation.
People-to-People Linkages
To enhance cultural and social interactions:
- The establishment of consulates in Bengaluru (India) and Addu City (Maldives) was agreed upon.
- Plans to set up higher education institutions, skill centers, and an Indian Council for Cultural Relations Chair at the Maldives National University.
Regional Cooperation
- Both nations reaffirmed their commitment to collaborate in regional and international forums, particularly in the Colombo Security Conclave (CSC), which focuses on maritime security and counterterrorism.
Political Engagement
- The two countries agreed to formalize cooperation between their respective parliaments, recognizing shared democratic values as a driver of bilateral relations.
- This will enhance legislative collaboration and mutual understanding.
Why the Shift in Stance?
President Muizzu's softened approach towards India can be attributed to several critical factors:
Economic Crisis
- The Maldives is grappling with a severe economic downturn, marked by dwindling foreign exchange reserves—currently just USD 440 million, barely enough to cover 1.5 months of imports.
- This economic instability necessitates a stable and supportive partnership with India.
Tourism Dependency
- Indian tourists are a vital component of the Maldivian economy, contributing significantly to its tourism revenue.
- The strain in India-Maldives relations had resulted in an estimated USD 150 million loss due to a decline in Indian visitors.
- Reviving this sector is crucial for economic recovery.
Strategic Importance
- India has historically been a key player in the Maldives' development and security landscape.
- The Maldives’ decision to alienate India could jeopardize its own regional stability and security.
- Recognizing India's role as the ‘First Responder’ in crises (e.g., the 2014 water crisis and the COVID-19 pandemic) emphasizes the need for cooperation.
Geopolitical Balancing
- President Muizzu's diplomatic strategy appears to involve balancing relations with both India and China.
- By adopting a more pragmatic approach, the Maldives can leverage partnerships with India while maintaining a diversified foreign policy that includes engagement with China.
Political Realism
- The previous tensions fueled by political rhetoric and social media spats were seen as damaging to bilateral relations.
- This visit is a strategic move to ensure strong ties with India, given the economic and geopolitical significance of the partnership.
Significance of Maldives for India
Strategic Location
- The Maldives is situated along key International Shipping Lanes (ISLs) in the Indian Ocean, essential for global trade and energy flows.
- Approximately 50% of India’s external trade and 80% of its energy imports traverse these lanes.
Countering Chinese Influence
- India views the Maldives as a critical player in counterbalancing China's growing influence in the region.
- Strengthening ties with the Maldives is vital for India to maintain its strategic foothold in the Indian Ocean.
Maritime Security
- A cooperative relationship with the Maldives is essential for ensuring a favorable maritime environment in the Indian Ocean, aligning with India’s strategic priorities and security interests.
Climate Change Collaboration
- The Maldives, being highly vulnerable to climate change and sea-level rise, serves as an important partner for India in addressing environmental challenges and promoting climate resilience strategies.
Conclusion
- President Muizzu's recent state visit to India signifies a critical turning point in the Maldives' diplomatic landscape.
- Amid economic hardships, this renewed partnership highlights India's role as a key ally in fostering strategic and economic ties.
- By moving towards cooperation, both nations can not only address immediate challenges but also work together to stabilize the Indian Ocean region, ensuring peace, stability, and prosperity for both countries.
- This strategic alignment offers a blueprint for future collaboration, balancing economic growth with regional security imperatives.
