New Delhi [India], March 17 : Former Maldives President Mohamed Nasheed on Monday emphasised the crucial role India plays in the island nation's prosperity and security, stating that good relations with India are vital for Maldives' safety, security, and prosperity.
Nasheed is in India to participate in the Raisina Dialogues 2025. Speaking to ANI, Nasheed said, "I don't think Maldives can prosper without very good relations with India. Our safety, security, and prosperity rely on our good relations with India."
Nasheed's comments come as the Maldives faces a mounting debt crisis, exacerbated by China's lending practices and trade policies.
"In the past, changes in governments have swung the relationship from being bad to good and bad to good. But recently, the new government has also patched up their differences with India, and that's encouraging," he said.
Nasheed pointed out that the new government is facing difficulties in implementing the Free Trade Agreement (FTA) with China.
"But there is still a difficulty with the new government implementing the free trade agreement with China and the impact that it will have not only on the Maldives but also what it can mean to India. I think it would be difficult for many in India to understand why the government had done that," he added.
The China-Maldives Free Trade Agreement (FTA), implemented in January 2025, has worsened the country's economic vulnerabilities, with Maldives exports comprising less than 3% of bilateral trade, compared to China's dominating 97% import share.
Notably, the Maldives is grappling with a mounting debt crisis that threatens its economic sovereignty, as foreign exchange reserves dwindle to precarious levels while substantial debt repayments loom.
According to an article by human rights advocate and freelance journalist Dimitra Staikou on Medium, China's lending practices and trade policies have significantly accelerated the island nation's financial deterioration.
Dimitra also highlighted that the China-Maldives Free Trade Agreement (FTA), implemented in January 2025, has worsened the country's economic vulnerabilities rather than providing relief.
"Of the approximately USD 700 million in bilateral trade, Maldives exports comprise less than 3 per cent compared to China's dominating 97 per cent import share. Under the FTA, Maldives removed tariffs on 91 per cent of goods from China, a concession that has yielded little reciprocal benefit given the country's narrow export base," she wrote.
The FTA has also led to a significant decline in government revenue from import duties, falling by 64% from MVR 385 million to MVR 138 million. Furthermore, the agreement has opened the Maldivian tourism sector to Chinese companies and financial institutions, with financial benefits largely flowing back to Chinese companies rather than strengthening the Maldivian economy.
In contrast, India has been a significant partner for Maldives, providing financial aid, infrastructure development, and security cooperation. The two countries have a long-standing relationship, with India being one of the first countries to recognize Maldives' independence in 1966.
Nasheed's comments highlight the importance of maintaining good relations with India, particularly in light of the challenges posed by the China-Maldives FTA. As the Maldives navigates its economic crisis, its relationship with India is likely to play a critical role in shaping its future prosperity and security.