India has raised its financial assistance to the Maldives from Rs 400 crore (USD 48 million) to Rs 600 crore (USD 72 million) for the 2025-26 fiscal year, reflecting renewed efforts to strengthen ties between the two nations. The increase comes at a time when the Maldivian government, under President Mohamed Muizzu, is working to recalibrate its relationship with New Delhi following a period of strained diplomatic engagements.
Shifting Relations and Renewed Cooperation
The allocation boost follows a significant shift in India-Maldives relations, particularly after India’s withdrawal of military personnel from the Maldives earlier this year. The move was in response to President Muizzu’s electoral campaign promise to remove Indian military presence, a stance that initially suggested a pivot towards China. However, recent developments indicate a renewed push for cooperation between the two nations.
Earlier this month, Maldivian Defence Minister Ghassan Maumoon visited India, signalling efforts to rebuild military and strategic cooperation. His visit follows a series of engagements aimed at strengthening regional security collaboration, economic development, and infrastructure projects.
India’s Broader Foreign Aid Strategy
The Maldives’ increased aid is part of India’s broader foreign assistance programme under its ‘Neighbourhood First’ policy, with a total of Rs 5,483 crore (USD 658 million) allocated for foreign aid in the coming fiscal year. Of this, Rs 4,320 crore (USD 518 million) has been designated for immediate neighbours, focusing on infrastructure development, power transmission, and connectivity projects.
Bhutan remains India’s largest aid recipient, receiving Rs 2,150 crore (USD 258 million), followed by Nepal at Rs 700 crore (USD 84 million). Meanwhile, Sri Lanka’s aid has increased to Rs 300 crore (USD 36 million) as it continues to recover from its economic crisis.
Future Prospects for Maldives-India Ties
India’s decision to increase aid to the Maldives illustrates the importance of maintaining stable bilateral ties, particularly as both countries navigate regional security dynamics and economic partnerships. While initial diplomatic tensions followed President Muizzu’s election, recent high-level engagements suggest a pragmatic approach to restoring cooperation.
With growing concerns over regional stability and economic resilience, India’s financial commitment to the Maldives may signal deeper collaboration in the years ahead. However, how this assistance translates into tangible development projects and political alignment remains to be seen.
