By Dr. Sudha Ramachandran

The massive hike in India’s aid allocation to the Maldives this year underscores the enhanced priority it accords this Indian Ocean archipelago. In a sharp jump from the $4 million it set aside for the Maldives last year, India’s Ministry of External Affairs has allocated $30 million for it in 2015-16.

As in the past, South Asia (excluding Pakistan) hogs the bulk of India’s development aid largess, accounting for 84% of the $1.6 billion foreign aid allocated for 2015-16. Bhutan continues to get most of this aid (63%), with Afghanistan (7%), Sri Lanka (5%), Nepal (4%) and Bangladesh (3%) trailing far behind. While the Maldives will receive just 2% of India’s aid in 2015-16, it’s significant that its share has undergone a roughly seven-fold increase from last year.

The Maldives consists of 1,192 coral islands strewn across the equator over an area of 90,000 sq kms. While the archipelago’s stunning physical features i.e. its emerald green waters and pristine beaches attract tourists, it is its geographic location that contributes to its strategic significance and draws the attention of the big powers. The Maldives sits along major sea lanes, including the East-West shipping route through which much of Middle East oil headed for East Asia is transported.  The archipelago is located just 340 km from the Indian coast.

India-Maldives relations have been warm generally. India was among the first countries to establish diplomatic relations with Male after it attained independence from British colonial rule in 1965. Delhi extended robust support to Maldivian President Maumoon Gayoom through his 30-year-long authoritarian rule, even sending its troops to the archipelago to repel an attempt to overthrow him in 1988.  India has been Male’s ‘big brother,’ the most influential foreign power in Male for decades. The Chinese are now challenging that.

Over the past decade, China has shown growing interest in Maldives. Economic co-operation is expanding rapidly and at the expense of India. For instance, in 2012, the Maldivian government terminated a multi-million dollar contract for development of Male airport that it had awarded India’s GMR Infrastructure and awarded it subsequently to a Chinese company.  Maldives has expressed interest in participating in China’s plan for a Maritime Silk Route.

India fears that the growing warmth between Maldives’ and Beijing will culminate in a Chinese naval presence in the archipelago. Indian analysts argue that China is eyeing a base at one of the atolls.

Besides China’s rising influence in the Maldives, India has been concerned over the political instability there. Mass protests by supporters of the Gayoom regime, pro-democracy activists, Islamists, etc has kept the country in a state of ferment for over a decade now and India fears that especially in the context of rising religious radicalism in the Maldives, anti-India terror groups will take root there and seek sanctuary in the archipelago’s many uninhabited islands. These anxieties have prompted India to intensify co-operation with successive Maldivian governments.

Aid diplomacy has been an important part of India’s strategy to retain/reclaim influence in the Maldives. In the 1980s and 1990s such aid to the archipelago went towards building its long-term educational and health infrastructure.  Indian aid intensified in 2007 in response to China’s mounting interest in the Maldives.

However, since 2010, the amount of aid that Delhi sets aside for Maldives has fluctuated wildly, laying bare India’s confusion in how to deal with Male. In 2012 for instance, India reacted strongly to the Maldivian government’s cancellation of the airport contract with GMR and froze aid. But the amount was stepped up the following year, only to be slashed significantly in 2014-15.  The 2015-16 hike indicates that Delhi is back to placing hope on aid diplomacy to build influence in the Maldives.

Will India’s enhanced aid to the Maldives work to counter Chinese influence? Much will depend on Delhi’s timely and efficient implementation of promised projects.

An important feature of India’s aid diplomacy in South Asia is that while it is generous in extending largess, project deadlines are rarely met. Of course, the nature of much of India’s aid, a major part of which goes towards building capacity and developing of democratic institutions, makes it hard to evaluate outcomes.  With regard to infrastructure projects, however, India scores poorly with regard to timely delivery especially when compared to the Chinese. Besides stepping up largess, India will need to improve execution of projects to deal effectively with the Chinese challenge in the Maldives.

Dr. Sudha Ramachandran is an independent journalist/researcher based in Bangalore, India who writes on South Asian political and security issues.She can be reached at

(Copyright 2015 Asia Times Holdings Limited, a duly registered Hong Kong company. All rights reserved. Please contact us about sales, syndication and republishing.)

Leave a comment