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India must invest more in regional integration

Even though India is an island of economic growth and stability in the region, its path forward lies through a stable and secure neighbourhood.
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OUTREACH: External Affairs Minister S Jaishankar met Maldives President Muizzu (left) last week. PTI
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EVEN as India’s ‘Neighbourhood First’ policy has suffered a huge blow with the meltdown of the Sheikh Hasina regime in Bangladesh, it has managed a significant turnaround with a smaller but important neighbour, Maldives. The process is an indicator as to how India is seeking to readjust its neighbourhood policy from its earlier over-emphasis on security.

To be fair, both sides can take credit for this. India refused to get rattled by the initial anti-Indian moves of the Muizzu government and continued to maintain an even tenor in ties. Yet by a not-so-subtle call to boycott Maldivian tourism in January that nearly halved Indian tourist inflow into the country, New Delhi ensured that Male got the message.

Muizzu changed course in March this year following his visit to China. In an interview to the local media, he spoke of the importance of India to his country and that India would “continue to remain Maldives closest ally.” He acknowledged India’s role in Maldives and the importance of ongoing projects facilitated by India and expressed gratitude for their contribution.

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One factor in this development was the fact that Maldives is indebted to India to the tune of nearly $0.5 billion and the new Maldivian Government has been looking for leniency in repayment terms. Muizzu could not but have seen how New Delhi had bailed out Sri Lanka in 2022 when the country was hit by a major economic crisis and at a time when China had dithered. New Delhi came through for Maldives as well when, in May, the State Bank of India deferred the repayment of $50 million by a year.

But it is not just the Indian debt that worries Muizzu. As Aditya Gowdara Shivamurthy of the Observer Research Foundation has pointed out, the nation’s economy is undergoing “a severe crisis and is struggling to stay afloat”. Borrowing by past governments have saddled the country with a debt-to-GDP ratio of 110 per cent and its reserves are rapidly depleting.

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But none of these clouds were visible in the recently concluded three-day visit of External Affairs Minister S Jaishankar to the Maldives, the first high-level trip to the country by an Indian minister after President Muizzu assumed power in November 2023. This was a signal that India-Maldives relations were once again on an even track. Jaishankar held meetings with Muizzu, Foreign Minister Moosa Zameer, Defence Minister Ghassan Maumoon and the ministers of finance, economic development and trade.

Jaishankar visited several of the projects India is involved in. Several of them are funded through India’s Lines of Credit. Among the key projects are the Greater Male Connectivity Project, the Addu Reclamation and Shore Project and a major four-lane bridge project to develop it as a regional hub whose centrepiece will be the Gan International Airport. Also being developed with Indian help is the Hanimaadhoo International Airport expansion project, whose foundation stone was laid by Jaishankar in January 2023.

Relations between the two countries came under severe strain when Muizzu came to power on an ‘India Out’ platform and immediately pushed for the removal of all of the small number of Indian military personnel stationed in the islands to service Indian-supplied helicopters and aircraft for search and rescue operations.

He pointedly made his first visit to Turkey and then to China where he signed a slew of agreements seeking to end the island nation’s dependence on food imports and healthcare from India. His first meeting with Prime Minister Modi was at the sidelines of the COP28 climate summit in Dubai in December 2023. His first official visit took place in June when he visited New Delhi to attend the swearing-in of PM Modi’s third government.

In the past, China has made major inroads into the Maldives by promoting a range of mega- infrastructure projects and providing liberal aid and loans. The big Indian concern is of Chinese maritime activities in the Maldives. A Chinese company has been given the lease of Feydhoo Finolhu island, located close to Male and there have been periodic reports about the sale to China of the Gadhoo island, next to the Gan airport, in the southern part of the country. Indian objections led to the scrapping of plans to build a Joint Ocean Observation Station in its western most atoll of Makunudhoo.

As the record shows, India has moved beyond its ‘security first’ approach and is willing to engage neighbours through an all-round policy emphasising trade and development along with security. In the case of the Maldives, India has, however, taken the precaution of developing a new base in the Minicoy island that is closest to the Maldives, and shoring up its naval presence in Lakshadweep.

But on a long-term basis, India needs to put serious money and effort into promoting regional integration. BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) has not really worked, and the Bangladesh uncertainty makes it less likely that it will do so soon. There is a need to go back to SAARC and its South Asian Free Trade Area (SAFTA) project. No doubt this involves even trickier diplomacy, especially in dealing with Pakistan, but India needs to look ahead instead of backwards. It should be clear by now that even though India is an island of economic growth and stability in the region, its path forward lies through a stable and secure neighbourhood. An integrated South Asian region provides this option and can also be the basis of common security and prosperity.

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