The Maldives Walks a Tightrope: Balancing Ties Between India and China
The Maldives is once again caught in a delicate balancing act, this time walking a tightrope between India and China. While bolstering ties with India represented by a flurry of agreements and Prime Minister Narendra Modi’s upcoming visit in 2025, the archipelago canned strategic defense agreements with India just a year prior, opting for a closer embrace with China.
The turnaround can be attributed to the Maldives’ precarious economic situation. With a GDP-to-debt ratio reaching an alarming 110%, economic woes colored the narrative. India ultimately became the saving grace, extending a $760 million bailout through currency swap agreements orchestrated just days before potential default. This financial lifeline has undoubtedly ameliorated immediate concerns
But behind the façade of improved relations lies a more complicated tale.
The India Reset
Muizzu’s visit to India showcased a stark contrast to the “India-Out” sentiment that marked his electoral campaign last year. Following a resounding electoral win, predictions foretold cooling India-Maldives relations. Yet, Muizzu softened his rhetoric, recognizing India as a “fully cognizant” partner capable of easing the Maldives’ financial burden. This newfound trust materialized in concrete forms – a $50 million lifeline from the State Bank of India, signifying a signed $50 million from the State Bank of India.
This Relationship reset was a relief for New Delhi
while the bilateral relationship with India, in particular, suffered setbacks recently in India’s neighborhood. For India, this shift provided an opportunity. This included resurrection of stalled projects, with India readily resuming assistance with the “Greater Male Connectivity Duroject,” the largest infrastructure initiative undertaken in the Maldives, highlighting India’s dedication to a regional relationship.
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A Diplomatic Tangent – Maldives Plays China
While India provided the much-needed financial lifeline, its influence is countered by growing Chinese presence in the Maldivian political landscape
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## Navigating Shifting Sands: An Interview on the Maldives
**Host:** Welcome back to the show. Today, we’re diving deep into the complex geopolitical dance between the Maldives, India, and China. With us is Dr. Anya Sharma, a leading expert on South Asian international relations. Dr. Sharma, thanks for joining us.
**Dr. Sharma:** It’s a pleasure to be here.
**Host:** The Maldives seems to be walking a tightrope, balancing ties between its traditional partner, India, and the rising power of China. Can you shed some light on this delicate situation?
**Dr. Sharma:** Absolutely. The Maldives has long found itself caught in the crosshairs of this geopolitical tug-of-war. While it shares close cultural and historical ties with India, China has been steadily increasing its influence in the region, offering attractive economic deals and infrastructure investments [[1](https://edition.cnn.com/2024/03/05/asia/maldives-china-military-assistance-pact-india-intl-hnk/index.html)].
**Host:** And this delicate balance has been further strained by recent events, hasn’t it?
**Dr. Sharma:** Precisely. Last year, the Maldives under the leadership of President Muizzu seemed poised to distance itself from India. He campaigned on an “India-Out” platform, raising concerns about India’s influence.
**Host:** Yet, there seems to have been a shift. We’re seeing a flurry of agreements between India and the Maldives, and Prime Minister Modi is scheduled to visit in 2025. What triggered this change?
**Dr. Sharma:** The Maldives’ precarious economic situation played a significant role. With a
debt-to-GDP ratio hovering around 110%, the country was teetering on the brink of default. India stepped in with a crucial $760 million bailout package. This financial lifeline has undoubtedly bolstered the relationship.
**Host:** So, while this India reset is welcome news for New Delhi, is it a sustainable solution in the long-term?
**Dr. Sharma:** That’s the million-dollar question. While the financial assistance has demonstrably eased immediate concerns, the underlying geopolitical dynamics remain complex. China will undoubtedly continue to court the Maldives with its own enticing proposals. The Maldives will need to carefully navigate this delicate balancing act to ensure its economic security and independent foreign policy.
