India–Maldives Relations 2025: Diplomacy, Development & the Indian Ocean Reset
A Strategic Perspective for UPSC Aspirants
✍️ By Suryavanshi IAS
🔍 Why This Topic Matters for UPSC
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GS Paper II: International Relations, Neighbourhood Policy
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GS Paper III: Infrastructure, External Sector, Strategic Security
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Essay & Interview: Diplomacy, India’s Global Role, Maritime Strategy
🌏 Context: Why Maldives Is More Than Just a Neighbour
The Maldives isn’t just a tiny island in the Indian Ocean — it's a strategic maritime partner, a diplomatic battleground, and an economic partner-in-progress for India.
PM Narendra Modi’s state visit to the Maldives on July 25–26, 2025 signals more than goodwill — it reflects a deep recalibration of foreign policy, economic strategy, and regional power dynamics.
⚖️ Background: From Diplomatic Drift to Strategic Realignment
After the election of President Mohamed Muizzu in 2023, relations hit a low point due to anti-India sentiment and calls to remove Indian military personnel. However, a diplomatic recalibration began in October 2024 with President Muizzu’s visit to India.
Now, PM Modi’s return visit marks a full-circle moment — transforming friction into cooperation.
🗣️ “A cherished friendship.” — PM Modi on 60 years of India–Maldives ties
🧭 India's Neighbourhood First & SAGAR Doctrine in Action
🔹 Neighbourhood First
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Prioritising peaceful, stable, and economically integrated South Asia.
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Maldives is essential for India’s periphery diplomacy in the Indian Ocean.
🔹 SAGAR (Security and Growth for All in the Region)
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Focus on maritime cooperation, security, and sustainable development.
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Maldives plays a gateway role in this doctrine.
💰 Economic Diplomacy: LoC + Debt Relief = Mutual Benefit
✅ Line of Credit (₹4,850 crore)
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First ever in Indian rupees (not dollars) → Boosts INR internationalisation
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Supports infrastructure: ports, energy, housing, tourism
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Tackles Maldives' twin deficit (fiscal + current account)
✅ Debt Restructuring
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Annual repayment slashed from $51M to $29M → 40% relief
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Relieves fiscal stress amid slow tourism recovery
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Strengthens India’s role as a development partner, not a debt trapper
✅ Sectoral Cooperation (via 7 MoUs/Agreements)
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Fisheries & Aquaculture
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Tourism & Environment
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Digital Public Infrastructure (like UPI, Aadhaar-inspired models)
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Roadmap for India–Maldives Free Trade Agreement
⚔️ Strategic & Security Dimensions
🔸 Maritime Security
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Maldives lies near India’s 8° Channel — critical for trade and naval movements
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India keen to counter China’s String of Pearls strategy
🔸 Defence Cooperation (Potential Areas)
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Coastal radar systems
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Search and rescue support
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Training and military assistance
🔸 Soft Power + Diaspora
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Cultural links, education, medical tourism, and diaspora bonding
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Modi’s interaction with the Indian community in Male reflects people-centric diplomacy
🌐 Balancing China's Influence
China’s presence through its BRI projects (airport, housing) is undeniable. However:
| China’s Model | India’s Model |
|---|---|
| Debt-based projects | Grant + LoC-based, rupee-denominated |
| Strategic debt | Capacity-building, economic sustainability |
| No diaspora links | Strong cultural and people ties |
🔑 Lessons for UPSC Aspirants
| Theme | UPSC Relevance |
|---|---|
| Neighbourhood First | GS II: Bilateral ties, regional cooperation |
| Economic Diplomacy | GS III: External sector, infrastructure |
| Strategic Security | SAGAR, Indo-Pacific, China challenge |
| Cultural Diplomacy | Essay, IR theory, soft power use |
🧠 UPSC Mains Practice Qs
Q1. “India’s Neighbourhood First policy is effective only when it combines strategic patience with economic generosity.” Discuss in light of India–Maldives 2025 engagement.
Q2. What role does economic diplomacy play in achieving India’s foreign policy goals? Evaluate with reference to the Indian Ocean Region.
🎯 Conclusion: Diplomacy Reclaimed, Region Rebalanced
India’s outreach to the Maldives in 2025 is not just about bilateral warmth — it’s a template for future diplomacy:
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Using economic levers to regain influence
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Countering strategic competitors through development
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Championing region-first, not self-first policies
PM Modi’s visit marks a course correction that aligns well with India’s long-term vision for the Indian Ocean — as a zone of peace, growth, and shared prosperity.
📘 Stay updated with Suryavanshi IAS for detailed analysis on IR, GS, and Prelims + Mains booster content. Smart strategy for smart aspirants.
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