Context:

• Maldivian President’s three-day visit to India this week seems to have brought a tumultuous phase in India-Maldives ties to a close.
• India underscored that the recent elections in the Maldives represented the collective aspirations of the people for democracy, the rule of law and a prosperous future.
• India desired “to see a stable, democratic, prosperous and peaceful Republic of Maldives”.

Points of engagement:

• Recent visit has seen the two sides emphasise their traditionally close bond.
• India the island nation’s “closest friend” and “reaffirmed his government’s ‘India-First’ Policy”, committing to working together closely with India.
• India, for its part, announced a financial assistance package of $1.4 billion for the Maldives in the form of budgetary support, currency swap agreements and concessional lines of credit.
• Both have agreed to ensure that they would keep other’s security interests in mind as they consolidate cooperation in the Indian Ocean Region (IOR).
• They have agreed to strengthen maritime security cooperation in the IOR through coordinated patrol and aerial surveillance.
• In an attempt to boost trade ties, India “welcomed the expanding opportunities for Indian companies to invest in the Maldives”.
• Areas such fisheries development, tourism, transportation, connectivity, health, education, information technology, new and renewable energy and communications were earmarked for enhancing bilateral cooperation.

The China factor

• Under previous govt., the Maldives had veered too close to China for India’s comfort, welcoming Chinese money for major infrastructure projects and signing a controversial free trade agreement (FTA).
• India’s entreaties for political moderation and closer security ties were summarily ignored.
• China’s role in the Maldivian economy is under the scanner today amid growing concerns about the money the Maldives owes to China for infrastructure projects undertaken by Chinese construction companies.
• These infrastructure projects include the China-Maldives Friendship Bridge, which connects Malé’s eastern edge to the western corner of the island of Hulhulé.
• Faced with this crisis, the new Maldivian government is looking to India for more budgetary support to help meet its development goals and is also planning to revise the FTA with China.
• The Indian government is also trying to ensure help reaches Male in time so that New Delhi regains some of its lost space in the Maldives’ foreign policy and politics.
• Malé has also made it clear that while the neighbourhood will clearly be a priority for the recent government, China will continue to play an important role as an economic partner. 
• But the logic of geography dictates that India’s role will be critical in determining the trajectory of political developments in the Maldives.
• India’s patient handling of the Maldives crisis over the last few years has positioned it well. By coordinating its response with other like-minded regional and extra-regional players, 

The domestic dynamic:

• Going forward, the Maldives would need the support of India as its challenges remain acute.
• The institutional fabric of the country has been battered as the threat of Islamist extremism has grown in potency.
• Governance will continue to be challenging as the forces which came together to bring down the previous govt. may not be cohesive enough in running the nation and strengthening its democratic foundations.

Way Ahead:

• India should not be deterred by temporary setbacks. Instead of perpetually viewing the dynamics from a China-centric perspective, it must keep its eyes firmly on the long term.
• The more invested New Delhi is in strengthening democratic institutions in its neighbourhood, the better returns it will get in its foreign policy.

Source:TH