Incumbent president Abdulla Yameen Abdul Gayoom made a resounding statement early in his term. His government would look to the east for a progressive partnership. The statement though veiled, was clear enough. Maldives was replacing or the at the very least distancing India as its 'closest ally.'
China’s forays into Maldives, located in India’s backyard in the Indian Ocean, has already sparked concerns in New Delhi. While India has been closely watching the developments in Male, it has expressed its concerns with the tiny island nation.
The global superpower has fully exploited the falling out between the once close neighbours over numerous incidents, none more so than the premature annulment of a contract to run the archipelago's main airport. Incessant allegations that New Delhi was backing the opposition has further fueled tension between the two governments.
But at the end of 2017, Maldives struck a 'dagger' through the heart of New Delhi after hastily signing a free trade agreement with its fierce rivals China. The agreement comes in the backdrop of Yameen's visit to Beijing in December. This will be a reciprocal visit after the first-ever visit by Chinese president Xi Jinping to Maldives in September 2014. The significance of the development is further accentuated by the fact that Maldives is the only country in the neighbourhood which has not been visited by Prime Minister Narendra Modi after he cancelled a proposed trip in March 2015 due to the turbulent political situation.
India alleges that Sino-Maldivian trade balance remains considerably in favour of China, and there are concerns that the FTA will further increase the deficit and push Maldives towards a debt trap like Sri Lanka -- an issue that has alarmed Delhi amid apprehensions of neighbourhood plunging into economic crisis in future.
To further rub salt in the wound, on the sidelines of the FTA agreement, president Yameen also pledged support for China’s 21st century Maritime Silk Road (MSR), which India has already expressed concerns over, especially because of its implications in the region.
India has also been apprehensive about reports that Beijing could establish a military base in the Maldives. However, both China and Male have refuted these reports and said New Delhi's fears were groundless.
The Maldives-China FTA is expected to exempt over 95 percent of bilateral trade flows from tariffs while enhancing cooperation in areas including finance, medicine, tourism, and fishing. Both New Delhi and Male have quickly down played the growing Chinese presence in the Maldives insisting that the historical relations remain as strong as ever. President Yameen recently reiterated that India would always be Maldives' "closest ally" and top officials of his government had claimed that Maldives remain open to a FTA with India.
According to official sources, New Delhi would dispatch a high level delegation to the Maldives for what is perceived to be crunch talks on future diplomatic, bilateral and trade relations between the two countries.
With the China-Maldives friendship bridge slated for its grand opening and presidential elections in the Maldives on the horizon, 2018 could be the defining year for Indo-Maldives relations.