EAM on a visit to Maldives to review bilateral engagement

Contact Counsellor

Last Updated27/03/2022

The visit is part of India’s continuing high-level engagement with the Maldives government in areas including maritime security, development cooperation and financial assistance during the pandemic.
He will also launch key India-backed projects in the Indian Ocean archipelago.

Both signed a trade agreement in 1981
Bilateral trade : US$ 290.27 mn with trade balance for India.
India is Maldives’ 4th largest trade partner after UAE, China and Singapore.
Indian imports from Maldives : worth 3.42 mn US $ mainly consist of scrap metals
Indian exports: worth 290.27 mn US $ includes variety of engineering and industrial products like drugs and medicines, radar apparatus, rock boulders, aggregates, cement and agriculture produce like rice, spices, fruits, vegetables and poultry produce etc.
Both countries have signed Instrument of Ratification for the Treaty on Mutual Legal Assistance in Criminal Matters
Investment by SBI: it has been playing a vital role in the economic development of Maldives since February, 1974 by providing loan assistance for promotion of island resorts, export of marine products and business enterprises.
SBI's COVID-relief: SBI has provided liquidity support of USD 16.20 million for local businesses and deferred loan repayment for over 200 retail accounts.

India has gifted Patrol Vessel named ""KAAMIYAAB” to Maldives National Defence Force.
India provides the largest number of training opportunities for MNDF.
Key projects: Composite Training Centre for MNDF, Coastal Radar Surveillance System and construction of new Ministry of Defence
Two indigenously designed and developed advanced Light Helicopters (ALH) are also given by India to Maldivian armed forces.

US $500 million assistance for Greater Male Connectivity project (GMCP) to connect Male to three neighbouring islands
Major completed development assistance: Indira Gandhi Memorial Hospital, Maldives Institute of Technical Education, Construction of National Police Academy etc.
Grants for projects under High Impact Community Development Projects (HICDPs): include projects such as ambulances, Convention Centre, drug rehabilitation centre, police station up-gradation, development of Addu Tourism zone etc.

Direct cargo ferry service b/w India and Maldives,
Creation of an Air Travel Bubble b/w India and Maldives,
Renewal of quotas for supply of essential commodities to Maldives for 2020‐21
Extension of financial assistance to Maldives to help them deal with the devastating impact of Covid‐19 on their economy.

Maldivian economy is heavily dependent on its tourism sector, accounting for ~ quarter of GDP.
In 2018, India was the 5th largest source of tourist arrivals in Maldives (6.1%).
Medical tourism: India provides treatment and health services at a nominal cost.
It is one of the most accessible countries to be approached for medication.

Chinese debt trap diplomacy: Maldives’ reliance on China to develop > US$2.5 billion in infrastructure projects - accumulation of foreign debt 40% of country’s GDP.
Signing FTA with China ignoring India: Maldives also endorsed its Maritime Silk Road project shunned by India for its strategic implications in IOR.
Political instability: Maldives as democracy is yet to take a firm footing.
Eg: Maldives announced termination of a USD 511 million project with the Indian infrastructure company GMR Infrastructure Limited in 2012.
Terrorism and radicalisation: Maldivians drawn towards terrorist groups like Islamic State (IS) and jihadist groups - increasing possibility to use Maldivian islands as a launchpad for terror attacks against India cannot be rejected.
Concerns of workers: Maldives denied work permits to ~2000 Indians working there in 2018 and job advertisements mentioning ‘Indians need not apply’, denied visas.

To become a Net-security provider in IOR, India needs close military, naval ties with Maldives.
There is a need to enhance regional cooperation by using platforms like Indian Ocean RIM Association and Indian Ocean Naval Symposium.
‘India-First Policy’ of Maldives and India’s ‘Neighbourhood First Policy’ are intuitively complementary, implementing them with strategic sensitivity is of utmost importance.
India needs to adhere to Gujral doctrine to guide conduct of foreign relations with India’s immediate neighbours.