Relations between India and the Maldives became tense following Maldives President Mohamed Muizzu’s directive to expel Indian military personnel from the islands shortly after he assumed leadership. The troops, who had been conducting surveillance operations in the Maldives, were withdrawn earlier this year and substituted with civilian staff. This created a considerable tension between the two countries, that was aggravated even more in March, when the Maldives formalized a military agreement with China.
The Maldives, renowned for its picturesque beaches, has been a favored destination among Indian travelers. Nevertheless, a significant boycott by Indian tourists commenced this past January following remarks made by ministers in Muizzu’s cabinet, who criticized Indian Prime Minister Narendra Modi for promoting India’s Lakshadweep islands as an alternative tourist spot. In response to these comments, the ministers were subsequently suspended after New Delhi expressed its disapproval.
During the initial stages of the dispute, Muizzu made a trip to Beijing where he proposed that the Maldives enhance its tourism efforts targeting Chinese visitors. Nevertheless, in May, Maldivian Tourism Minister Ibrahim Faisal encouraged Indian tourists to explore the islands, emphasizing the significant role of tourism in the nation’s economy.
Now it appears that India is finally willing to reestablish its relationship with the Maldives after initial falling-out over the latter’s position on China.
Indian Foreign Minister Subrahmanyam Jaishankar is currently visiting the Maldives on an official trip. This marks the minister’s inaugural visit to the island nation following a deterioration in relations between the two countries earlier this year, coinciding with the establishment of the new Maldivian government under President Mohamed Muizzu.
Yesterday, Jaishankar stated that India and the Maldives had formalized an agreement to implement India’s Unified Payments Interface within the island nation. This development will allow the use of RuPay cards, India’s homegrown payment card system comparable to Visa and MasterCard, for transactions in Indian rupees in the Maldives, thereby facilitating payment processes for tourists.
Earlier today, Jaishankar participated in a ceremony at the President’s office to mark the completion of water supply and sewage systems on 28 islands in the Maldives, which were financed through a credit line from New Delhi.
During the event, Muizzu referred to India as one of the “closest allies and invaluable partners” of the Maldives. In June, Muizzu visited the Indian capital to engage in discussions regarding the strengthening of the “close and historic” ties that exist between the two countries.
The Indian foreign minister also expressed on X (formerly Twitter) a dedication to enhancing the relationship between India and Maldives for the advantage of both nations and the broader region.
Situated to the south of India, the Maldives is of significant strategic value and is regarded as an essential element of India’s ‘neighborhood first’ initiative. Despite some tensions with Muizzu, India’s development projects in the Maldives have accelerated over the past fiscal year, and included a $500 million investment in infrastructure for roads and bridges in the Maldivian capital, Malé, as well as two airports, each valued at nearly $130 million, located on different islands of the archipelago. Both initiatives were facilitated by a line of credit from India. In May, New Delhi further demonstrated its support for the Maldivian government by extending a $50 million treasury bill for an additional year.
