Prime Minister Modi as the Guest of Honor and President Muizzu mark the 60th Independence Day of Maldives on July 26, 2025, in Male. (©Indian Prime Minister's Office)
Prime Minister Narendra Modi visited the Maldives on July 25-26. His trip came against the backdrop of tense ties between the two neighboring countries dating to the not-too-distant past. Though the initial salvo fired by the Maldivian president soon after his election in November 2023 shocked India, New Delhi did not take any drastic measures. Since then, much water has flowed down the Ganges.
Since then, Maldives has fallen into a debt trap due to having borrowed massively from China. Currently, that seems to be a daunting financial challenge. Maldives needs to service external debt worth approximately $600 million USD in 2025, which is projected to rise to a staggering $1 billion in 2026.
In addition, the Maldivian leadership has realized that burning bridges with India can be costly in the long term. All this has led to a rethinking in the Maldivian leadership. And this seems to have led to the invitation to Indian Prime Minister Modi as the Chief Guest for the 60th Maldivian Independence Day celebrations.
Behind the Initial Antagonism
In the run-up to the Maldivian presidential elections, back in November 2023, the then-presidential hopeful, Mohamed Muizzu, had run on an "India Out" campaign. Following his victory, he led a call for India to withdraw its military personnel from the Maldives with immediate effect.
Initially, these personnel were deployed to operate and maintain two helicopters and an aircraft donated by India, which were used mainly for humanitarian assistance and rescue missions. Later on, New Delhi replaced them with civilian staff.
Ties further nosedived when several junior ministers in the Maldivian youth ministry posted derogatory comments about Indian PM Modi on social media. That led to a row between the two countries. Those officials were suspended after a strong diplomatic response from New Delhi.
It is also worth noting that the number of tourists from India has come down drastically. In the past, Indian travel agencies ran a boycott campaign against tourism to Maldives, in light of the derogatory posts made by the Maldivian ministers against India's prime minister.
Takeaways From This Trip
While he was in Maldives, PM Modi signed several important agreements. These included an Extension of Line of Credit (LoC) to Maldives of INR 4,850 crores (approximately $565 million). New Delhi also announced the reduction of Maldives' annual debt repayment obligations by 40%, from $51 million to $29 million.
The two countries also agreed to launch talks on a free trade agreement. They further jointly issued a stamp to commemorate the 60th anniversary of India-Maldives diplomatic relations.
What's In It for India?
PM Modi noted in his Joint Press Statement with the Maldivian President that: "India is the closest neighbor of the Maldives. The Maldives holds a key place in both India's 'Neighborhood First' policy and our Mutual and Holistic Advancement for Security and Growth Across Regions (MAHASAGAR) vision. India also takes pride in being the Maldives's most trusted friend. Be it natural disasters or pandemics, India has always stood by the Maldives as the 'First Responder.' Whether it was ensuring the supply of essential commodities or supporting economic recovery post-COVID, India has always worked hand-in-hand with the Maldives."
For India, the turnaround in bilateral ties is important. It clearly shows China and other countries that, in the short term, they may be able to dent India's influence in the region to some extent, but that won't last for long.
Yet, for India, other challenges in the neighborhood remain, particularly in countries like Bangladesh. However, it is best that knee-jerk reactions are avoided, as seen in the case of renewed India-Maldives ties.
India has followed a "Neighborhood First" policy ever since PM Modi came to power for the first time in 2014. Maldives is also an important part of India's MAHASAGAR vision, which gels well with Japan's Free and Open Indo-Pacific vision.
What's In It For Japan?
For Japan, it means that China's influence is decreasing once again in India's immediate neighborhood. This is certainly good news for Japan in the short and the long term.
It is worth noting here that India and Japan are already collaborating on the building of infrastructure in Sri Lanka. This improvement in India's ties with Maldives means that India and Japan could collaborate there, too.
The Japan Maritime Self-Defense Force operates a base in Djibouti, on the Horn of Africa. And the sea lanes of communication in the region are key for Japan, both in a strategic and economic sense. Maldives lies along those key sea lanes, which bring oil to energy-deficient Japan.
The Road Ahead
The wheel indeed seems to have turned a full circle now. Nevertheless, it is noteworthy that, after coming to power, President Muizzu broke tradition by choosing to travel to China before visiting India.
The joint statement released during President Muizzu's visit to China in Jan 2024, soon after taking office, declares: "China firmly supports the Maldives in upholding its national sovereignty, independence and national dignity, respects and supports the Maldives' exploration of a development path that suits its national conditions, and firmly opposes external interference in the internal affairs of the Maldives." It can be seen as a statement directed at India.
However, in the long-term scheme of things, India and Maldives are very important for each other. And this is why they are coming closer. In this also lies a message for other countries, which are coming closer to China.
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Author: Dr Rupakjyoti Borah
Dr Rupakjyoti Borah is a Senior Research Fellow with the Japan Forum for Strategic Studies, Tokyo. The views expressed here are personal.
