EAM on a visit to Maldives to review bilateral engagement

Contact Counsellor

EAM on a visit to Maldives to review bilateral engagement

  • 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.

Economic cooperation b/w India-Maldives

  • 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.

Defence cooperation

  • 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.

Development Assistance

  • 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.

Covid assistance

  • 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.

Way Forward

  • 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.