Bilateral International Relations

India & Maldives Relation

In News:

  • India’s Foreign Secretary is on a visit to the Maldives.

News Summary:

  • During the Indian Foreign Secretary’s visit, India and Maldives signed four MoUs (memoranda of understanding).
    • This comes two months after the Foreign Ministers of India and Maldives held a virtual discussion.
    • The US Secretary of State (Foreign Minister) also recently visited Maldives, after his India visit for a 2+2 meeting.
  • The two sides apprised each other of the respective national approaches to deal with Covid-19, and assessed the robust growth in bilateral ties.

India’s focus on Maldives:

  • Amid India’s growing concern over China’s growing influence in the region, the ties with the Maldives have remained under sharp focus.
  • Previous Maldives President Yameen moved away from India, and got close to China leading to strained ties with India.
  • Since, the current President Solih came to power, he has made “India First” as his foreign policy.
  • During the pandemic, India has gone the extra mile to assist Maldives with food, medicines etc.
  • India also said it would share a Covid vaccine with Maldives, whenever it was ready.
  • The pandemic has also helped to tilt the tourism balance towards India. An air bubble created between India and Male has brought over 35,000 Indian tourists to the islands so far.
    • Tourism is the mainstay of the Maldives economy, which has taken a huge hit due to the pandemic.

4 MoUs signed:

  • A key MoU was related to a $100 million grant, which is part of India’s $500 million package for the Greater Male Connectivity Project (GMCP).
    • As part of this, $400 million line of credit will be provided by the Exim Bank of India.
  • Two of the MoUs were related to high impact community development projects in Maldives.
  • The countries also signed an MoU on cooperation in sports and youth affairs.
  • India noted that the MoUs signed illustrate the strong development partnership which is multi-faceted and designed to meet the specific requirements of the government and people of Maldives.

India to support Maldives’ bid for UNGA presidency:

  • Maldivian Foreign Minister Abdullah Shahid has put up his candidature for the Presidency of the 76th session of the UN General Assembly (UNGA) in 2021.
  • India reiterated its support for Shahid’s bid for UNGA presidency, and also urged the Maldives to play a more prominent role at the UN.

About: Greater Malé Connectivity Project (GMCP)

  • India has decided to support the implementation of Greater Malé Connectivity Project (GMCP) through a financial package consisting of a grant of $100 million and a new line of credit of $400 million.
  • This will be the largest civilian infrastructure project in Maldives, connecting Malé (the capital) with three neighbouring islands — Villingili, Gulhifalhu (where a port is being built) and Thilafushi (new industrial zone).
  • Once completed, this project will improve connectivity between the four islands, boost economic activity, generate employment and promote holistic urban development in the Malé region.
  • Besides the bridges connecting three big islands, a business park and a port are also part of the project.

About: India-Maldives relations

  • India and Maldives share ethnic, linguistic, cultural, religious and commercial links since a long time.
  • India was among the first to recognize Maldives after its independence in 1965 and to establish diplomatic relations with the country.
  • Except for a brief period between 2012 to 2018 (when there was a change in approach towards India), relations between the two countries have been close and multi-dimensional .
  • Maldives recognizes the importance of India’s strategic role in Maldives and looks at India as a net security provider.

Defence Cooperation:

  • Since 1988, defence and security has been a major area of cooperation between India and Maldives.
  • A comprehensive Action Plan for Defence has been signed between the two countries in 2016 to consolidate the defence partnership.
  • India provides the largest number of training opportunities for Maldivian National Defence Force (MNDF), which meets around 70% of their defence training requirements.
  • The defence cooperation extends to other areas of Joint Exercises, Maritime Domain Awareness, gifting of hardware, infrastructure development, etc.
  • A proposal to link MNDF’s College of Defence Studies with India’s Defence Universities is also under process.

Disaster Management support:

  • India was the first to assist Maldives during the 2004 Tsunami as well as the water crisis in Malé in 2014.
  • Under Operation NEER (in 2014), India had immediately sent bottled drinking water to Malé, to address the water crisis, by utilising Air Force aircraft and Navy ships.
  • India also offers customised training for MNDF Fire and Rescue Service in India.
  • These incidents have established India’s capacity to help Maldives in different disasters that the country may across.

Bilateral Economic and Trade Relations:

  • India and Maldives signed a trade agreement in 1981, which provides for export of essential commodities.
  • Growing from a small number, India-Maldives bilateral trade has reached US$ 288.99 Million (in 2019), which is heavily in favour of India.
  • India is Maldives’ 4th largest trade partner after UAE, China and Singapore.
  • Indian imports from the Maldives primarily includes scrap metals, while Indian exports to the Maldives include food supplies, engineering and industrial products.
  • State Bank of India has been playing a vital role in the economic development of the Maldives since 1974, by providing loan assistance for promotion of island resorts, export of marine products and business enterprises.

Tourism:

  • The Maldivian economy is heavily dependent on its tourism sector, which is the major source of foreign exchange earnings and government revenue.
  • Tourism directly accounts for about a quarter of Gross Domestic Product (GDP) of Maldives and indirectly for a much larger proportion of GDP.
  • In 2018, India was the 5th largest source of tourist arrivals in Maldives. However, in the first half of 2019, with 99% growth, India moved to the second spot and was placed just below China.

Indian Diaspora in Maldives:

  • Indians are the second largest expatriate community in Maldives with an approximate strength of around 22,000.
  • About 25% of doctors and teachers in Maldives are Indian nationals.

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