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    India-Maldives Projects Advance Despite Tensions with China


    Finance Outlook India Team | Monday, 19 February 2024

    India has intensified its development assistance to the Maldives, with projects making significant progress last year, despite strained relations following Maldivian President Mohamed Muizzu's call for Indian troops to leave the country.

    Amidst competition among global powers for influence in the Indo-Pacific region, both India and China have sought to court the Indian Ocean nation. While historically close to India, the Maldives has recently leaned towards China under Muizzu's leadership.

    According to an Indian official and government documents, New Delhi has allocated nearly 7.71 billion rupees ($93 million), almost double its budgeted amount of 4 billion, for projects in the Maldives this fiscal year, ending in March.

    Despite tensions arising from Muizzu's election promise to end the "India First" policy and remove around 80 Indian troops, development cooperation between India and the Maldives has remained consistent.

    An Indian official, speaking anonymously, noted that rather than halting, the pace of project implementation has accelerated. This increased momentum is attributed to India's higher allocations for the fiscal year.

    Muizzu's office has not yet responded to requests for comment. However, India's efforts in the Maldives include a $500-million project for road and bridge construction around Male, as well as two airport projects valued at nearly $130 million each on distant islands, financed through a line of credit from India.

    While Muizzu visited Beijing last month, a visit to India is pending. Both countries have agreed to replace Indian troops by May, with India emphasizing their role in humanitarian aid and medical evacuations.

    Indian budget documents reveal a substantial increase in spending for Maldivian projects, from 1.83 billion rupees in fiscal 2022-23 to 7.71 billion this year, second only to India's investment in Bhutan, which amounted to 24 billion rupees.

    Despite India's significant engagement, the Maldives' closer ties with Beijing have raised concerns in New Delhi. The recent docking of a Chinese research vessel at a Maldivian port, despite India's objections, underscores India's apprehensions about China's expanding presence in the Indian Ocean region.



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