हिंदी साहित्य: पेन ड्राइव कोर्स
This just in:

International Relations

India Announces Package to Maldives

  • 22 Aug 2020
  • 7 min read

Why in News

India has committed to Maldives a five-pronged package including air, sea, intra-island and telecommunications to help it deal with the economic impact of the Covid-19 pandemic.

Key Points

  • The package includes:
    • Greater Malé Connectivity Project (GMCP)
      • A financial package consisting of a grant of 100 million USD and new line of credit of 400 million USD.
      • This will be the largest civilian infrastructure project in Maldives, connecting Malé (the capital) with three neighbouring islands — Villingili, Gulhifalhu (where a port is being built under Indian line of credit) and Thilafushi (new industrial zone) – by construction of a bridge-and-causeway link.
      • This will boost economic activity, generate employment and promote holistic urban development in the Malé region.
    • Direct Cargo Ferry Service: It will be run between India and Maldives.
      • The service is expected to enhance sea connectivity and provide predictability in supplies for importers in Maldives and exporters in India.
    • Air Travel Bubble Between India and Maldives: This will facilitate movement of people for employment, tourism and medical emergencies.
      • Maldives is the first neighbouring country of India with which an air bubble is being operationalised.
    • Quotas for Supply of Essential Commodities: This was renewed for 2020-21. The commodities include food items as well as river sand and stone aggregates to assure food security, and supply of essential construction items.
    • Financial Aid: In addition a financial aid of 250 million USD will be provided to Maldives by India.
  • Impact on India-Maldives-China
    • The Indian aid is being appreciated and contrasted with the previous expensive commercial loans to Maldives by China which are being termed “debt-trap diplomacy” of China, wherein China intentionally extends excessive credit to another country with the intention of extracting economic or political concessions from the debtor country.
    • The GMCP is also being compared to the Chinese built Sinemale Friendship bridge connecting Male to two other islands as it will be much bigger than the latter.
    • The India-Maldives relationship suffered a setback when Maldives entered into a Free-Trade Agreement (FTA) with China in 2017.
    • Since September 2018, India and Maldives have seen a number of bilateral visits.
    • At present, India-assisted projects in the region include water and sewerage projects on 34 islands, reclamation projects for the Addl island, a port on Gulhifalhu, airport redevelopment at Hanimaadhoo, and a hospital and a cricket stadium in Hulhumale.
    • India had also announced a 800 million USD Line of Credit to Maldives in December 2018.

Significance of Maldives for India

  • Geographical: Maldives’ proximity to the west coast of India.
    • Maldives is barely 70 nautical miles away from Minicoy -the southernmost island of Lakshadweep.
    • Lakshadweep group is separated from Maldives by Eight Degree Channel.
    • It is situated at the hub of commercial sea-lanes running through Indian Ocean. More than 97% of India’s international trade by volume and 75% by value passes through the region.
  • History: India and Maldives share ethnic, linguistic, cultural, religious and commercial links.
    • India was among the first to recognize Maldives after its independence in 1965 and later established its mission at Male in 1972.
    • Operation Cactus: In 1988, in response to a request from the Maldives, India activated Operation Cactus to deploy its military and ensure regime continuity in Male.
  • Defence: Its potential to allow a third nation’s naval presence in the area.
    • Since China’s naval expansion into the Indian Ocean, Maldives' significance has steadily grown and now it’s at the heart of international geopolitics.
    • India provides the largest number of training opportunities for Maldivian National Defence Force (MNDF), meeting around 70% of their defence training requirements.
    • ‘Ekuverin’ is a joint military exercise between India and Maldives.
  • Geo-political: Maldives is an important aspect of India’s ‘Neighbourhood First’ policy.
  • Trade and Tourism: India is Maldives’ 4th largest trade partner after UAE, China and Singapore. In 2018, India was the 5th largest source of tourist arrivals in Maldives.
    • In 2018, India was the 5th largest source of tourist arrivals in Maldives.e.
    • India and Maldives signed a trade agreement in 1981, which provides for export of essential commodities.
    • India-Maldives bilateral trade now stands at US$ 288.99 Million heavily in favour of India.
  • Disaster Management: The Government of India has provided large-scale assistance to Maldives in the aftermath of the 2004 Indian Ocean tsunami and during the 2014 Male water crisis.
  • Diaspora: There is a significant Indian diaspora in the Maldives. Indians are the second largest expatriate community in Maldives with an approximate strength of around 22,000. About 25% of Doctors and Teachers in Maldives are Indian nationals.

Way Forward

Given the economic hardships being faced by Maldives due to Covid-19 pandemic and previous debts, this package will definitely warm up the relationship between both the countries. This will also provide a strategic edge to India over China with regards to Maldives.

Source : TH

SMS Alerts
 

Please login or register to view note list

close

Please login or register to list article as bookmarked

close
 

Please login or register to make your note

close

Please login or register to list article as progressed

close

Please login or register to list article as bookmarked

close