Maldives President Mohamed Muizzu has agreed to let India deploy defence platforms and assets in the Maldives, marking a significant turnaround in his government’s approach to New Delhi. This decision, which comes months after Muizzu ordered the withdrawal of all Indian military personnel from the Indian Ocean archipelago, highlights the complex geopolitics of the region and the Maldives’ growing reliance on India amidst a severe economic crisis.
During his first state visit to New Delhi since his election in September 2023, Muizzu met with Prime Minister Narendra Modi at Hyderabad House, where the two leaders held comprehensive discussions on defence, security, and economic cooperation. The talks resulted in a landmark agreement to elevate bilateral ties to a Comprehensive Economic and Maritime Security Partnership, with a renewed focus on enhancing the Maldives’ defence capabilities and addressing its pressing economic challenges.
President Muizzu’s decision to allow India to deploy defence platforms in the Maldives marks a significant shift in policy, especially considering his previous leadership role in the controversial ‘India-Out’ campaign. The campaign, which gained momentum during the 2023 presidential election, called for the removal of Indian military personnel stationed in the Maldives for humanitarian purposes, arguing that their presence undermined the nation’s sovereignty.
In line with this campaign, Muizzu’s government, upon taking office, demanded the withdrawal of all Indian troops by May 2024. This included personnel who operated the Dornier aircraft and Advanced Light Helicopters that India had gifted to the Maldives for emergency evacuations from its remote islands. At the time, the move was widely interpreted as a nod to China, which has been keen to expand its influence in the Maldives, a strategically located nation in the Indian Ocean.
However, the Maldives’ escalating economic crisis has prompted Muizzu to reconsider his stance. With the country’s foreign exchange reserves dwindling to just $440 million — barely enough to cover 1.5 months of imports — and China offering little in the way of meaningful assistance, the Maldivian president has turned to India for support.
In response to the Maldives’ urgent needs, India has not only agreed to re-engage in defence cooperation but has also extended a crucial lifeline to help the island nation navigate its economic challenges. As part of the new agreement, India will deploy defence platforms and assets to bolster the Maldives National Defence Force (MNDF) and improve its surveillance and maritime security capabilities. New Delhi will also provide the Maldives with radar systems and other technological support to enhance its ability to monitor its vast exclusive economic zone (EEZ), which has faced both traditional and non-traditional maritime security threats.
PM Modi, addressing the media after the meeting, highlighted India’s ongoing commitment to the Maldives. “India has consistently acted as the first responder for the Maldives,” he said, citing past instances where India provided emergency assistance, such as delivering vaccines during the COVID-19 pandemic and supplying drinking water during natural disasters.
PM Modi further stated the importance of cooperation in training and capacity-building for the MNDF. “Together, we will strive for stability and prosperity in the Indian Ocean region. We will enhance our cooperation in hydrography and disaster response,” PM Modi stated, sending a clear signal to China, which has been vying for influence in the Maldives, particularly since Muizzu’s ascent to power.
Beyond defence, India is playing a pivotal role in helping the Maldives avert a looming debt default. One of the major outcomes of the Modi-Muizzu meeting was a currency swap agreement signed between the Reserve Bank of India (RBI) and the Maldives Monetary Authority (MMA). Under the SAARC Currency Swap Framework for 2024-27, the RBI will provide the Maldives with access to $400 million under the USD/Euro Swap Window and Rs 3,000 crore under the INR Swap Window. This agreement, which is valid until June 2027, is expected to provide critical liquidity support to the Maldives, helping it manage short-term foreign exchange requirements and balance-of-payments stress.
The economic assistance from India doesn’t stop there. PM Modi also announced a one-year extension of the $100 million worth of Treasury Bills issued by the Maldivian government and subscribed by the State Bank of India, offering further relief to Muizzu’s administration.
The two leaders also reviewed and agreed to fast-track several key infrastructure projects that India is funding in the Maldives. Among the most significant is the ‘Ekatha’ Harbour project at Uthuru Thila Falhu (UTF), a naval base where India has been building and supporting the development of a harbour that will enhance the MNDF’s operational capabilities. This project had been under scrutiny earlier this year by a parliamentary panel in the Maldives, which was investigating a 2021 agreement allowing India to develop the UTF harbour.
In addition to defence infrastructure, the two leaders remotely inaugurated a new runway at Hanimadhoo International Airport, built with Indian financial support. They also launched India’s Rupay card in the Maldives, further deepening economic ties between the two countries. Over 700 social housing units, constructed with Indian assistance, were also handed over to beneficiaries, symbolising the tangible benefits of India’s development partnerships in the Maldives.
Muizzu’s rapprochement with New Delhi represents a significant shift in the Maldives’ geopolitical positioning. The country has historically played a delicate balancing act between its two major partners — India and China. While India has long been a first responder to the Maldives’ crises, China has sought to expand its influence in the region through infrastructure investments and loans, particularly under its Belt and Road Initiative (BRI).
However, with Beijing’s tepid response to the Maldives’ current economic plight, Muizzu appears to be leaning back towards India. During his remarks after the meeting, the Maldivian president expressed optimism about the future of economic cooperation between the two nations. He highlighted his government’s interest in concluding a Free Trade Agreement (FTA) with India, which he believes will unlock the full potential of bilateral trade and attract more Indian investments in sectors such as tourism and development.
“We look forward to concluding the Free Trade Agreement with India, which will enable us to harness the full economic potential between our countries,” Muizzu stated, thanking PM Modi for India’s timely financial assistance and for standing by the Maldives during difficult times.
The Modi-Muizzu summit is being hailed as a turning point in Indo-Maldives relations. With both defence and economic ties strengthened, the two nations are poised to navigate the challenges of the Indian Ocean region together, countering external influences while fostering stability and security. Muizzu’s warming relations with India may also signal a recalibration of the Maldives’ foreign policy as it navigates a complex geopolitical environment dominated by major powers like China and India.
