New Delhi: India’s diplomatic relations with the Maldives have faced a turbulent year, hitting a new low after Prime Minister Narendra Modi’s visit to Lakshadweep sparked ire among Maldivian politicians.
This tension, compounded by the Maldivian government’s ‘India Out’ campaign led by President Mohamed Muizzu, resulted in a notable decline in Indian tourists visiting the island nation. However, recent developments suggest that the Maldives may be reconsidering its stance and seeking to rebuild ties with its regional neighbor.
External Affairs Minister S. Jaishankar’s visit to Malé, which concluded yesterday, marks a significant step in mending the fractured relationship. During his visit, Jaishankar signed several Memorandums of Understanding (MoUs) aimed at enhancing bilateral cooperation and strengthening developmental ties. Key agreements included the capacity building of an additional 1,000 Maldivian civil servants in India and the introduction of the Unified Payments Interface (UPI) in the Maldives, which could enhance financial connectivity between the two nations.
In a move symbolizing renewed cooperation, Jaishankar and Maldivian Foreign Minister Abdulla Shahid, with the presence of President Muizzu, jointly inaugurated India’s Line of Credit (LoC)-assisted project for the development of a water and sewerage network across 28 islands in the Maldives. This is a significant shift, considering that Muizzu’s government had previously expelled Indian troops and technical workers from Malé.
Jaishankar also inaugurated six High Impact Community Development Projects (HICDPs) funded by Indian grant assistance. These projects, focusing on mental health, special education, speech therapy, and street lighting, are part of India’s ongoing commitment to supporting the Maldives’ development.
Despite these positive developments, the Union Budget 2024, presented on July 23, revealed a significant reduction in financial aid to the Maldives. The budget allocated Rs 400 crore in grants for the 2024-25 fiscal year, a sharp decrease from the Rs 770 crore provided the previous year. This reduction reflects India’s recalibration of its aid strategy amid shifting geopolitical dynamics and the Maldives’ earlier pro-China stance.
President Muizzu, who rose to power with a platform critical of India’s influence in the Maldives, now appears to be taking steps to restore a more balanced relationship. The reduced aid and the diplomatic engagement suggest a period of recalibration, where both nations are reassessing their strategic interests.