India–Maldives Relations

India and the Maldives share deep historical, cultural, and strategic ties have evolved into a multifaceted partnership encompassing defence, infrastructure, trade, tourism, and people-to-people links. The recent thaw in relations, marked by PM Modi’s July 2025 visit, a USD 565 million Line of Credit, initiation of Free Trade Agreement talks, and landmark infrastructure cooperation (Greater Malé Connectivity Project), underscores a renewed commitment to shared prosperity, maritime security, and regional stability.

1. Historical Foundations

Bilateral ties date to Maldivian independence in 1965, with India among the first to recognize the new republic and establish diplomatic relations. Key milestones:

• 1988 Operation Cactus: India’s swift military intervention thwarted a coup and cemented its role as the Maldives’ first responder.

• 2004 Tsunami & 2014 Water Crisis: Rapid Indian aid underlined the partnership’s humanitarian dimension.

• Ongoing cultural and educational exchanges trace back centuries across the Indian Ocean.

2. Geostrategic Significance

The Maldives’ strategic location along key sea lanes highlights:

• Maritime Security: India’s SAGAR vision emphasizes safe, open seas, a stable Maldives is critical to monitoring Indian Ocean traffic and countering extra-regional influence.

• “Neighbourhood First” Policy: Ensuring a friendly maritime neighbour aligns with India’s security, economic, and diplomatic objectives.

3. Defence and Security Cooperation

Defence ties form a bedrock of trust:

• Post-Operation Cactus, India maintained a training mission, later transitioned from military to civilian technical assistance under Muizzu’s presidency.

• Joint exercises, Ekuverin (land forces) and Ekatha (naval drills), enhance interoperability.

• Infrastructure support for the Maldivian Coast Guard and collaboration on anti-piracy patrols strengthen maritime domain awareness.

4. Economic and Trade Dynamics

4.1 Bilateral Trade

Total trade reached an estimated USD 978.6 million in FY 2023–24, up from USD 973.4 million the prior year.
India’s exports (2024): USD 825.1 million, led by:

• Ships, boats, floating structures: USD 303.6 million

• Aircraft/spacecraft: USD 78.9 million

• Machinery, reactors, boilers: USD 48.1 million.
  Maldives’ exports to India (2024): USD 91.6 million, primarily aircraft scrap and metals.

4.2 Emerging Free Trade Agreement

On 25 July 2025, PM Modi and President Muizzu formally launched negotiations for an India–Maldives FTA, signaling deepened market integration and liberalization of goods and services.

4.3 Sectoral Partnerships

• Infrastructure: India extended a USD 565 million Line of Credit for projects including roads, housing, and health clinics, and reduced Maldives’ debt servicing by 40%.

• Digital Integration: NPCI’s UPI integration with Maldives Monetary Authority streamlines remittances and tourist spending.

• Fisheries & Aquaculture: MoU to boost sustainable marine resource management.

• Healthcare & Education: Recognition of Indian Pharmacopoeia and scholarships under “India Study” programs.

5. Infrastructure Cooperation

5.1 Greater Malé Connectivity Project (GMCP)

Funded by a USD 100 million grant and a USD 400 million credit line, GMCP will build a 6.74 km bridge–causeway linking Malé with Villingili, Gulhifalhu, and Thilafushi, the largest infrastructure venture in Maldives history.

• Status: Contract awarded to AFCONS in August 2021; 12th review held in Mumbai, September 2024.

• Impact: Eases transport bottlenecks for nearly 40% of national population; spurs economic growth around Gulhifalhu Port and Thilafushi industrial zone.

5.2 Social and Community Projects

• Handover of 3,300 social housing units in Hulhumalé under India’s Buyer’s Credit.

• Inauguration of roads and drainage in Addu City, plus six High Impact Community Development Projects.

• Delivery of health “Health Cube” kits and vehicles for emergency response.

6. Tourism and People-to-People Links

Tourism drives ~25% of GDP and ~70% of employment (direct + indirect).

• Indian arrivals: 291,000 (2021), 241,000 (2022), 209,000 (2023), with 10.9% market share.

• Maldives targets 300,000 Indian tourists in 2025, launching brand ambassadors and cricket camps in India.

Despite a dip in 2024 amid diplomatic tensions, PM Modi’s state visit and thaw have revitalized tourist confidence, with cargo and air ferry services also enhancing connectivity.

7. Current Geopolitical Dynamics

President Muizzu’s initial “India Out” policy gave way to rapprochement under pragmatic interests.

• India’s shift from military personnel to civilian technical teams (HAL personnel) assuaged sovereignty concerns.

• China–Maldives FTA (effective 2025) and infrastructure loans prompted India to double down on its “Neighbourhood First” policy.

• Today’s renewed partnership positions both nations as equal maritime neighbours, committed to a Comprehensive Economic and Maritime Security Partnership.

8. Pros and Cons