Male:

Notwithstanding the turbulence in their bilateral ties, the Maldives will soon launch India’s RuPay service, which a senior minister has said “will bolster the Maldivian Rufiyaa.” RuPay, a product of the National Payments Corporation of India (NPCI), is the first of its global card payment network in India, with wide acceptance at ATMs, POS devices, and e-commerce websites across India.

Minister of Economic Development and Trade Mohamed Saeed while announcing how both India and China have agreed to use local currency in bilateral trade, spoke about the upcoming launch of India’s RuPay.

“The upcoming launch of India’s RuPay service is anticipated to further bolster the Maldivian rufiyaa (MVR),” Saeed told state-run PSM News on Wednesday. He also emphasised that “addressing the dollar issue and reinforcing the MVR is a top priority for the current administration.

However, there has been no announcement of any date for the launch.

Last week, a news portal, CorporateMaldives.com, reported that Saeed conveyed that the card will be “formally utilised for transactions denominated in rupees within Maldivian territory.” “We are currently engaged in discussions with India to explore avenues for facilitating payments in rupees,” the minister said.

An India-Maldives joint statement during the official visit of the then President of Maldives Ibrahim Mohamed Solih to India in August 2022 said: “The two leaders welcomed the ongoing work to operationalize the usage of Rupay Cards in Maldives and agreed to consider further measures to boost bilateral travel and tourism and economic inter-linkages.” Over the last few years, multiple banks and payment companies from across various countries have partnered with NPCI International Payments Ltd (NIPL), the international arm of NPCI, to accept UPI and RuPay in one form or the other.

Ever since the pro-China President Mohamed Muizzu assumed power last November, the relations between the Maldives and India have soured. The repatriation of 80 plus Indian military personnel manning three aviation platforms earlier this month from the archipelago nation at his insistence has left a bitter note on bilateral ties.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Male:

In a goodwill gesture, India has decided to extend vital budgetary support to the Maldives government with the rollover of a USD 50 million Treasury Bill for another year on the Maldivian government’s special request, it was announced on Monday.

The State Bank of India has subscribed for one more year to the USD 50 million Government Treasury Bill, issued by the Ministry of Finance of Maldives, upon maturity of the previous subscription, the High Commission of India said in a brief statement on Monday.

The Indian government took this decision despite the bilateral ties experiencing turbulence since Maldives President Mohamed Muizzu, a pro-China leader, assumed office six months back.

These Government Treasury Bills are subscribed by SBI under government-to-government, a unique arrangement at zero cost (interest-free) to the Government of Maldives.

The continuation of subscription has been made at the special request of the Government of Maldives to secure budgetary support from the Government of India, the statement said.

The Maldivian government on Monday thanked India for its support.

“I thank EAM Dr S Jaishankar and the Government of India for extending vital budgetary support to the Maldives with the rollover of USD 50 million Treasury Bill. This is a true gesture of goodwill which signifies the longstanding friendship between Maldives and India,” Foreign Minister Moosa Zameer tweeted.

The Government of India has provided budget support of USD 50 million to the Maldives. The support was in the form of a rollover of USD 50 million Treasury Bill, for an additional year, through the State Bank of India, Male’, from May 13, 2024, the Maldivian Foreign Ministry said in a statement.

“Government of India’s decision to rollover the T-Bill came following a request to that effect made by Foreign Minister Moosa Zameer to India’s External Affairs Minister Dr S Jaishankar, during the official bilateral visit to India from May 8-10, the statement said.

The Government of Maldives is highly appreciative of the generous support that the Government of India has been providing to the Maldives in the form of budgetary support. A large number of infrastructural developmental projects and High Impact Community Developmental projects are underway with assistance from the Government of India, which consists of a notable part as grant assistance, the statement said.

The Government of Maldives looks forward to continuing this collaborative partnership for the mutual benefit and prosperity of their people, it said.

Zameer after coming back from the visit said that significant strides have been made in expediting India-assisted projects in the Maldives, as he underscored the government’s commitment to prioritising the resumption and completion of these projects.

It comes amid a downturn in the bilateral ties between the two countries since President Muizzu assumed office in November and immediately asked India to withdraw some 89 Indian military personnel from the country by May 10. The Indian military personnel were operating three aviation platforms in the island nation.

Zameer on Saturday said 76 Indian military personnel were replaced by civilian employees of the Hindustan Aeronautics Limited which manufactured the two helicopters gifted by India, thus also ending the suspense over the exact number of those repatriated at the insistence of Male.

However, the Maldives government has no intention of removing the doctors from India at Senahiya.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The Maldives, which was in hot water over boycott calls, has seen a hike in budgetary allocation for the Maldives from ₹400 crores in 2023-24 to ₹770.90 crores in the current fiscal.
| Photo Credit: AFP

India’s neighbourhood received a substantial share of the annual allocation under the Ministry of External Affairs for the 2024-25 interim budget presented by Finance Minister Nirmala Sitharaman on Thursday. Out of all the countries in the neighbourhood, Bhutan has received ₹2,398.97 crores as allocation for the current fiscal year while Nepal has come second with ₹650 crores for various development projects currently underway in the Himalayan country. For 2024-25, Nepal has received an allocation of ₹700 crores.

The Maldives which has been in news recently because of anti-India protests as well as remarks from its top leadership has seen a substantial bump in allocation. The allocation for the Maldives for 2023-24 was ₹400 crores which went up to ₹770.90 crores this time. This indicates that India is increasing investments in the archipelago nation. 

Indian projects in Bangladesh under current fiscal will receive ₹130 crores and ₹220 crores have been allocated for Afghanistan which is governed by the Taliban that is yet to find official recognition from India. Sri Lanka will receive ₹60 crores of the allocation for the current fiscal. Conflict struck Myanmar has received ₹370 crores in the current fiscal.

Explained | How is the interim Budget different from Annual Budget?

Among the island nations of the Indian Ocean, Seychelles, and Mauritius have received ₹9.91 crores and ₹370 crores respectively in the current fiscal. The port of Chabahar in Iran will receive an ₹100 crores as funding. ₹3,849 crores have been allocated for Lines of Credit under the Indian Development and Economic Assistance Scheme. Reflecting India’s growing engagement with African nations, the budget has allocated ₹200 crores for the African development projects; the figure is as per revised estimate for current fiscal.

Projects with Eurasian countries and Latin American countries have been allocated ₹20 crores and ₹30 crores respectively. Cultural and heritage projects have been allocated ₹10 crores in the current fiscal. The expenditure will increase during 2024 to 2025 and may touch ₹15 crores. 

Maldives’ new President-Elect says he wants to end the presence of Indian troops in the islands- is the election upset for New Delhi, and what is expected in the next few months in ties with the Indian Ocean neighbour?  

. Up ahead we will tell you about the history of ties, and India’s role in the Indian Ocean Region. 

We will also speak to one of the Maldives most prominent Presidents Mohamed Nasheed, who is always outspoken. 

1.     But first, Results of last week’s Presidential run off, or second round of elections came in in favour of the challenger candidate Dr. Mohamed Muizzu, who represented the PNC-PPM coalition, and defeated President Ibu Solih of the MDP with a convincing 8% lead. 

2.     Of the total 2.4 lakh valid votes counted, Muizzu won nearly 1.3 or 54% of the vote, to Solih’s 1.1, atleast 8 percentage points behind him.

3.     Dr. Muizzu, formerly the Mayor of Capital city Male is an engineer by training, a PhD and was the housing minister in the former government headed by President Abdulla Yameen 

4.     Remember, the first round that was held in early September had seen a smaller vote difference, and a third candidate, Ilyas Labeeb of The Democrats party led by Nasheed, who had broken from the MDP, had won about 7% of the vote, and that could have meant a different outcome if the ruling party had remained united 

5.     The opposition PPM, led by Yameen who is now in jail had started an “India out” campaign- calling for the removal of Indian military projects and other initiatives in the Maldives archipelago. While Muizzu wasn’t as overtly anti-India, he made “Sovereignty” a major plank 

6.     Yameen’s government had been seen as pro-China, had in 2017 signed an FTA with China which had upset many  in India 

7.     In contrast, Solih’s government had been seen as pro-India, as President Solih openly projected an “India First Policy”, signed many agreements with India including a major UTP- Uthuru Thilafalhu Coastguard harbour project that was seen as a cover for more permanent Indian military presence in the Maldives 

8.     As a result, the election was seen as a tussle between India First vs India out  campaigns, and as an extension an India vs China election 

Speaking at a rally after his victory, President-elect Muizzu confirmed what many in Delhi had feared, that he would ask Indian military troops stationed in southern atolls Laamu and Addu to leave. 

A day later, he met with the Indian Ambassador to Male, who handed over a letter of congratulations from PM Modi. 

When asked about Muizzu’s declaration about the Indian personnel moving out, here’s what the MEA spokesperson said: 

The focus of our partnership with Maldives has always been on capacity building and working together to address our shared challenges and priorities, you know, including security challenges and priorities. As neighbours, we need to collaborate closely to address these challenges confronting our region, such as transnational crimes as well as HADR, Humanitarian Assistance Disaster Relief situations. We look forward to engaging with the new administration in Maldives on all these issues. 

A quick word on India’s history with the Maldives 

1. Since its independence from the British in 1965, India has held very close ties with the islands, situated about 800 kilometres from Kochi. 

2. In 1978, President Maumoon Abdul Gayoom took charge, and made many visits to India, strengthened ties. 

3. In 1988, India sent its troops and ships to help Gayoom overthrow a coup attempt by a Maldives businessman and Sri Lankan Tamil fighters 

4. In 2008, after a sustained campaign for human rights and democracy, Mohamed Nasheed was elected President, he had been imprisoned and tortured for years in the 1990s, and founded the Maldivian Democratic Party. During his tenure, India began closer security cooperation, gifting or loaning 2 helicopters, and dornier aircraft to the Maldives along with patrol boats, for maritime reconnaissance, surveillance and coast guard security ops 

5. In 2012, Nasheed stepped down, after an uprising in his security forces over his decision to act against a judge. Many forget the problems with the judge had begun over India- during the SAARC summit there in 2009, statues gifted by India were defaced by a group of political islamist activists, but a judge gave them bail, which put him on collision course with Nasheed 

6. . In 2013, Abdulla Yameen of the opposition PPM was elected to power- Yameen sent Nasheed to prison in 2015 after he was convicted on terror charges. The charges were later dropped, but Nasheed was disqualified from running in the next elections. India had objected to Yameen’s actions including an emergency he imposed, and called for democracy in the islands, which led to a major strain in ties. That’s when Yameen signed the FTA with China, invited Chinese companies in for a number of major investments including the Hullumale island housing projects and friendship bridge, and threatened to evict Indian pilots and personnel from the islands. 

7. In 2018, India was visibly relieved when Yameen lost, and Nasheed’s long term friend Ibu Solih won the election, at the time seen as a proxy for Nasheed. Solih proved even friendlier than Nasheed, and India was invited to start many infrastructure projects including the $500mn Greater Male connectivity project funded by grants and concessionary loans from India. In 2021 they signed the Uthuru Thilafalhu project for which construction began this year, for India to build and maintain a coastguard harbour base- this sparked the India Out campaign 

So will the pendulum now swing back against India? With me is former Maldives President Mohamed Nasheed 

Remember the Maldives is a key element in India’s IOR strategy that includes working on :

-Placing naval and airforce personnel 

-Human assistance and Disaster relief ops, 

-Countering surveillance and military operations by China 

-Keeping IOR sea lanes secure and open from threats like piracy 

-Working with Indo Pacific partners including US, Japan, Australia, France, UK, EU 

India has a presence in 

-Maldives- personnel in Addu and Laamu, coastguard harbour base project 

-Sri Lanka patrol boats 

-Ports where Indian Navy can dock in Reunion, Madagascar, Oman, UAE 

-Chabahar port in Iran 

-Reports of an Indian base in the Seychelles- Assumption island 

-Naval facility in Mauritius Agalega islands- even the NSA Is an Indian 

-String of Radar and maritime communication facilities in Syechelles, Mauritius and Madagascar, Comoros 

-A number of dialogues including the IORA, ION, India-SL-Maldives trilateral 

WV Take:

When it comes to the domestic policy of India’s closest neighbours, given both geography and history, it is a mistake to play favourites. While the electoral win of Dr. Muizzu may not have been the desired outcome for the Modi government, it is necessary to see that being too close to the Solih government may have had a role in the pushback against him. India must not deal with its neighbours while nervously looking over its shoulder for China, more confidence in traditional ties, and the avoidance of a zero-sum mindset is necessary to build its strategic future in the IOR. 

WV Reading Recommendations: 

1.     Descent into Paradise: A Journalist’s Memoir of the Untold Maldives by Daniel Bosley 

2.     Great Game East: India, China and the Struggle for Asia’s Most Volatile by Bertil Lintner 

3.     Monsoon: The Indian Ocean and the Future of American Power by Robert D. Kaplan 

4.     The Maldives: Islamic Republic, Tropical Autocracy by John J. Robinson 

 5.     China in the Indian Ocean Region—India’s Security Challenges by Sidda Goud 

6.     Comprehensive Maritime Security in The Indian Ocean Region: Challenges and Opportunities by Sithara Fernando 

7.     Mapping the Indian Ocean Region by Darshana Baruah

Script and Presentation: Suhasini Haidar

Production: Gayatri Menon and Reenu Cyriac