Economy
India-Maldives ties under stress: What trade, tourism data shows
Summary
- Diplomatic ties between India and Maldives have come under stress, with several Indian social media users calling for the boycott of the island nation over controversial remarks about Prime Minister Narendra Modi by three Maldivian ministers.
A controversy that began online last week has escalated into a diplomatic tussle, straining the ties between India and Maldives. The conflict began after three Maldivian ministers, now suspended, made derogatory comments about Prime Minister Narendra Modi, sparking a backlash from India. Some Indian social media users are calling for a boycott of the Maldives, potentially affecting the strong trade and interpersonal ties between the two countries.
India has been a key contributor to the Maldives' tourism, ranking as the second-largest source of tourists in the first 11 months of 2023, with 183,371 visitors, latest available Maldives’ official data shows. Russia topped the list with 191,617 tourists visiting Maldives during the same period.
Data from the Maldives' ministry of tourism reveals a notable surge in Indian tourist arrivals to the island nation following the covid-19 pandemic. In 2019, the country welcomed 166,030 Indian tourists, but due to global travel restrictions in 2020, the numbers significantly dropped to 62,960. However, as travel restrictions gradually eased, there was a remarkable rebound in 2021, when 291,787 Indian tourists visited the Maldives. The trend continued into 2022, although there was a slight decrease in numbers to 241,382.
The Maldives depends on various countries for its import of goods. India was the second-largest contributor in 2022, constituting over 14% of the country's total imports. According to data from the International Monetary Fund (IMF), India’s exports to Maldives have increased from $170.59 million in 2014 to $496.42 million in 2022. In 2022, imports from India witnessed a 56% surge.
Amid the dispute, a local Chinese newspaper report has urged India to adopt a more "open-minded approach", further escalating tensions. New Maldives President Mohammed Muizzu is currently on an official tour to China, a move seen as a snub to India given his pro-China stance. (Other recent presidents used to visit India first.) Over the years, both India and China have been neck-and-neck in making a mark in Maldives' import market. According to IMF data, India has demonstrated steady growth, with its share in Maldives' total imports increasing from 8.55% in 2014 to 14.12% in 2022. China's share has exceeded India’s for several years, but was lower in 2022.
On Monday, India summoned Maldives High Commissioner Ibrahim Shaheeb. Numerous celebrities and individuals are using social media platforms to encourage tourists to explore domestic tourist destinations instead of Maldives. The ongoing dispute has led to some individuals reportedly opting to cancel their previously scheduled trips to the Maldives.
