Though small, the Maldives is an important Indian neighbour. India's Prime Minister Narendra Modi called the Maldives “a valued partner in the Indian Ocean neighbourhood” and said that India-Maldives “ties are built on a very strong foundation,” the contours of which “are defined by shared strategic, security, economic and developmental goals.” However, the bilateral ties are not without irritants, which can be seen in two broad areas: political and strategic.

Politically, India has consciously avoided interfering in the Maldives' internal affairs despite being invited to do so by the actors in the atoll state. New Delhi’s major concern has been the impact of political instability in the neighbourhood on its security and development. The February 2015 arrest of opposition leader Mohamed Nasheed on terrorism charges and the consequent political crisis have posed a real diplomatic test for Modi’s neighbourhood policy. Expressing concern over “the arrest and manhandling of former President Nasheed,” India urged “all concerned to calm the situation and resolve their differences within the constitutional and legal framework of Maldives.” As a result of the incumbent Abdulla Yameen government’s intransigence in heeding India’s appeal on Nasheed, Modi had to drop the Maldives from his four-nation Indian Ocean tour in March 2015. The move sent a conspicuous signal about Indian disappointment with the developments, which would undermine political stability in the Maldives. However, the message from Malé was very clear: “India will adhere to the principle of Panchsheel and will not intervene in domestic politics of Maldives.” In diplomatic parlance, “Panchsheel” is generally used in the Sino-Indian context. It was also to indicate China’s stand on the issue to New Delhi: “We are committed to non-interference in others internal affairs.” Despite this, Yameen went on to visit India three times since assuming power in 2013. In fact, during his latest visit in April 2016, Yameen reiterated his “India first policy” and signed six agreements ranging from defence to taxation. 

On the security front, at least two issues impinged on India-Maldives bilateral ties: Islamist radicalisation and the role of China. In the past decade or so, the number of Maldivians drawn towards terrorist groups like the Islamic State (IS) and Pakistan-based madrassas and jihadist groups has been increasing. Protestors bearing IS flags are not uncommon on the island. Approximately 200 Maldivian nationals have reportedly been fighting along with the IS. In terms of proportion to population, this number is quite high compared to other South Asian countries, irrespective of whether they are Muslim-majority countries. Political instability and socio-economic uncertainty are the main drivers fuelling the rise of Islamist radicalism in the island nation.

Pakistan-based jihadists groups like Lashkar-e-Taiba (LeT) have used these fault lines to their advantage. The LeT, through its front organisation, Idara Khidmat-e-Khalq, has established a foothold especially in the southern parts of the Maldives in the garb of the post-2004 tsunami relief operations. Events in West Asia, Afghanistan and Pakistan have also influenced Maldivian radicalisation. The youth, who return from their religious studies in certain Pakistani madaris controlled by various jihadist groups and from Saudi Arabian madaris, come back not only with radical ideas, but also with jihadi networks. The madrassa-educated youth are brainwashed to wage jihad in places like Afghanistan, Iraq and Chechnya. The returnees help in the recruitment of Maldivian youth to Islamist militant groups. 

India has two worries in this regard: one, the exfiltration of members of Indian terror groups like the Students Islamic Movement of India (SIMI) and the Indian Mujahideen (IM) to the Maldives after their crackdown in India; and two, the possibility of LeT using remote Maldivian islands as a launch pad for terror attacks against India and Indian interests. Overall, India's concern is regarding how radical Islamist forces have been gaining political influence in the neighbourhood.

In the recent past, China’s strategic footprint in India’s neighbourhood has increased. The Maldives has emerged as an important 'pearl' in China’s “String of Pearls” construct in South Asia. Given the Maldives's strategic location in the Indian Ocean, Beijing has been vying for a maritime base in the atoll with the primary motive of ensuring the security of its sea lanes, especially the unhindered flow of critically-needed energy supplies from Africa and West Asia through the Indian Ocean. 

Lately, the Chinese have remained among the top visitors to the Maldives. Beijing has evinced a keen interest in developing infrastructure in the Ihavandhoo, Marao and Maarandhoo Islands. During Chinese President Xi Jinping’s visit in 2014, the Maldives agreed to become a partner in China’s Maritime Silk Route. China has provided grant and loan assistance to the Maldives to build a bridge between the capital and the airport (called the China-Maldives friendship bridge). Chinese companies are involved in airport development and have now been handed islands for resort development. 

Therefore, it is not without reasons that the current dispensation in Malé holds the view that “it will be to the detriment of the Maldives to not engage with China.” Amendments to the Maldivian Constitution in July 2015 allowed foreigners to own land, including investments of over US$ 1 billion for projects where 70 per cent of the land has been reclaimed. Looking at the parameters, China will be the obvious beneficiary. Chinese nationals now account for the largest tourist arrivals in the islands.

India views the growing Chinese footprint in the Maldives with concern. India’s concern stems from the increasing Chinese strategic presence in the Indian Ocean region. Though the Maldivian government under Yameen has reassured India that the Chinese presence is purely economic, the concern of 'places turning into bases' is genuine. From the Indian point of view, because of Chinese largesse to the Maldives, economic leverages have not been working properly. It has become easy for the Maldives to play the China card against India.

Being a small country, the Maldives may tend to use the China card. However, it is well aware of India's importance in every sphere of its state-of-affairs. This has been proved time and again including in the recent water crisis. For its part, the main challenge to India’s diplomacy is balancing out all these contradictions into harmonious relations.