Maldives President Ibrahim Solih’s visit to India is being keenly watched in the region, especially as the two countries look to strengthen their bilateral economic relationship. The tourism driven archipelago with its strategic location, is crucial to India for its maritime security, especially at a time when geopolitical risks and threats are rising in the region.
Amid a steady drop in inflow of foreign direct investment (FDI) into Maldives, Male with its “India First” policy would be looking at Indian companies to set up or expand businesses in the country. At present, the largest chunk of FDI into the country comes from India. But China’s investments into Maldives especially through its Belt and Road Initiative rose significantly and even caught the attention of many policymakers.
According to the Georgetown Journal of International Affairs, by 2018, Beijing had completed a major upgrade—including a new 3,400-metre runway—at the Maldives’s main international airport, as well as a new bridge linking Malé to the island of Hulhumalé. However, the debt levels of the Maldives surged too.
Solih, after taking charge of the country in 2018, pulled out of the trade deal with Beijing. Subsequently, India also offered $1.4 billion to facilitate loan paybacks with additional financial support for community development projects.
Last year, India and Maldives signed a contract to develop the Greater Male Connectivity project (GMCP), the largest infrastructure exercise in the country with a $100 million grant from New Delhi along with a line of credit worth $400 million, in the country. This is also one of India’s biggest by India in the neighbourhood. The project involves construction of a 6.74 km long bridge and causeway link that will connect Male with other adjoining islands.
India is also a large source country for tourists in Maldives. According to Maldives’ Ministry of Tourism, more than 291,700 Indian tourists visited the archipelago in 2021 making up a 22 per cent market share followed by Russian tourists. As many as 222,422 tourists from Russia travelled to Maldives in 2021.
In May India partnered Male in completing an exercise related to the critical hydrographic survey, which helps in measuring the depth and the configuration of the ocean floor and thereby formulating nautical charts and other maritime issues relating to transportation and overall.
The second Joint Hydrographic survey, undertaken by the Indian Naval Ship (Sutlej).
While the exercise is critical to Maldives, it is also important for India as it boosts military security for both neighbours besides improving connectivity, navigation safety and economic development.
The first joint survey was undertaken in March 2021.
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