New Delhi: What began as a geopolitical recalibration is fast becoming a diplomatic rapprochement. Less than two years after Mohamed Muizzu’s election raised concerns over the Maldives drifting toward Beijing, India-Maldives relations are back on a more cooperative footing.
From economic support packages to expanding digital connectivity through India’s Unified Payment Interface (UPI) system, the reset in ties appears strategic and deliberate, as was evident in an interview given by Indian High Commissioner to the Maldives, G Balasubramanian, to the Sun Online news website.
Balasubramanian stated that the implementation of financial convenience for Indian tourists would serve as a huge incentive to further grow the Indian market in the Maldives.
“Whether it is the local currency settlement system or the UPI, if they come on board, I can immediately see a great increase of at least 15 to 20 per cent in terms of Indian tourists coming over to the Maldives,” the High Commissioner was quoted as saying.
When Muizzu was elected President of the Maldives in late 2023, it raised concerns in New Delhi. Known for his pro-China stance and campaign rhetoric calling for the withdrawal of Indian military personnel from the island nation, Muizzu’s ascent was widely interpreted as a sign of the Maldives potentially pivoting further toward Beijing. For a time, the diplomatic current between Male and New Delhi cooled, with India watching warily as one of its closest maritime neighbours appeared to distance itself from its longstanding strategic partner.
However, less than two years since that moment of uncertainty, India-Maldives relations are showing signs not just of recovery, but of renewed pragmatism and cooperation. In what appears to be a carefully managed diplomatic reset, both countries have taken steps to reframe their engagement, balancing national sensitivities with shared regional interests.
President Muizzu’s early decisions--particularly his push for Indian military personnel to leave the Maldives--were met with alarm in Indian strategic circles. Indian forces had been stationed in the Maldives primarily to operate and maintain two Dornier aircraft used for maritime surveillance, humanitarian operations, and disaster response. However, Maldivian nationalist sentiment, particularly amplified by Muizzu’s ‘India Out’ presidential campaign, painted this presence as a challenge to sovereignty.
New Delhi, in response, adopted a wait-and-watch approach, refraining from any public escalation while quietly initiating backchannel diplomatic efforts. It eventually agreed to replace the military personnel with Indian civilians for technical support roles, a compromise that helped diffuse tensions without appearing to capitulate or provoke further domestic backlash in the Maldives.
Under Muizzu, the Maldives’ foreign policy has seen a distinct departure from past traditions. Breaking with precedent, Muizzu chose Turkey, not India, for his first official state visit. His administration also declined to renew an existing hydrography agreement with India, citing national security concerns, and allowed a Chinese research vessel to enter Maldivian waters despite objections from New Delhi. Bilateral tensions escalated further after Maldivian politicians publicly criticised Prime Minister Narendra Modi over perceived tourism rivalry, triggering a diplomatic backlash.
However, by March this year, Muizzu appeared to shift course. In a marked departure from his earlier stance, he publicly affirmed that India remains the Maldives’ “closest ally” and expressed optimism that New Delhi would extend debt relief to the island nation amid its economic challenges.
In a media interview, Muizzu maintained that he had never made statements or taken actions that would harm Maldives-India relations.
“It is not appropriate to dismiss the assistance provided by one country to another as insignificant,” he was quoted as saying. He also reiterated his hope that India would consider easing repayment terms on the substantial loans accumulated by successive Maldivian governments – a request India later agreed to accommodate.
Building on this diplomatic thaw, Muizzu travelled to New Delhi in June last year to attend Modi’s swearing-in ceremony for a third term. Reinforcing the continuity of bilateral support, India’s Union Budget for 2024–25, presented in July, maintained a consistent allocation of Rs 400 crore in development assistance for the Maldives - the same as the previous year. Muizzu then made his first state visit to India in October last year.
Then again, last month, India provided vital financial relief to the Maldives by extending the maturity of a $50 million treasury bill for an additional year, underscoring New Delhi’s ongoing commitment to supporting the debt-laden archipelago nation. The move, facilitated by the State Bank of India (SBI), was made in response to a formal request from the Maldivian government and comes at a time when the Maldives continues to grapple with economic instability.
Now, in his interview with Sun Online, High Commissioner Balasubramanian said that a meeting had recently been held with Maldives Marketing and Public Relations Corporation (MMPRC) regarding initiatives that can be undertaken to increase Indian tourist arrivals to the Maldives.
Indian tourists play a vital role in sustaining the Maldivian tourism industry during its off-peak season. While travellers from Western countries typically flock to the Maldives in winter, Indian tourists tend to visit during the summer months, precisely when arrivals from Western markets decline. As a result, Indian visitors help fill the seasonal gap, making their presence especially important for the sector during the offseason.
Balasubramanian’s comments come even as reports suggest that Modi is likely to visit the Maldives to participate in that country’s Independence Day celebrations on July 26. When Maldivian Foreign Minister Abdulla Khaleel came on an official visit to India last month, he reiterated Muizzu’s extension of an invitation to Modi to visit the archipelago nation. If this happens, it will be Modi’s first visit to the Maldives after Muizzu came to power.
“Bilateral ties between India and the Maldives have changed in recent times,” Smruti Pattanaik, Research Fellow in the Manohar Parrikar Institute of Defence Studies and Analyses, who specialises in South Asia, told ETV Bharat. “New Delhi has signalled that if a country has good ties with China, it doesn’t mean that it cannot have good ties with India.”
She explained that the Maldives has its own needs and is faced with an economic stress. “The Maldives has a development partnership with India and needs economic aid,” Pattanaik said.
According to Abhinav Pandya, founder, director and CEO of the Udaipur-based Usanas Foundation think tank, the Maldives has been a centre of attention for the last many years because of two things.
“First, because of rising Islamist extremism,” Pandya said. “You must remember ISIS (Islamic State terrorist outfit) took around 400 recruits from the Maldives. And secondly, because of the rising influence of China. And emboldened by these two sentiments, the Maldives started marginalising India, and some of their political factions, particularly the Muizzu faction, started their anti-India rant.”
He said that the Maldives have realised that the compulsions of geopolitics are sometimes a static feature.
“You cannot change the geography,” he said. “The presence of the Indian Ocean is a very robust factor in the ties between the Maldives and India and defines the bilateral ties between the two countries. So, even if they come close to China or whatever China does, it’s a severe challenge for them. It is not possible for them to keep India on the fringes or to keep India out of that region. India has a historical presence there.”
Pandya further stated that Prime Minister Modi has also shown generosity and large-heartedness.
“Through the MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions) initiative, we have a policy to accommodate these smaller states in this region,” he stated. “We are very proactive and positive in approaching these tiny island nations. It is of great strategic imperative for India to keep these countries like the Maldives friendly.”
Thirdly, Pandya said, tourism is a major source of revenue for the Maldives.
“So, the Maldives cannot afford to lose Indian tourists,” he stated. “That’s the key to the economic strength of the Maldives. So, the economics is outdoing the political considerations.”
To sum up, from suspicion to rapprochement, the India-Maldives relationship has weathered an early storm under President Muizzu. What emerges now is a partnership recalibrated for mutual interest, rooted in geography, economics, and the quiet but persistent logic of regional interdependence.
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