With China’s help, Maldives plans to lower dependence on India in tourism, trade and healthcare: Data Premium

The Chinese make up for the minor reduction in Indian tourists in the Maldives following the diplomatic row between New Delhi and Malé

Maldives tourism hit: Controversial tweets by Maldives ministers against PM Modi sparked a call by some Indians on social media to boycott the Maldives | Photo Credit: AFP

In January, controversial tweets by deputy ministers of the Maldives on Indian Prime Minister Narendra Modi’s visit to Lakshadweep led to a diplomatic row between the two countries. The consequences of this row have been two-fold. The tweets sparked a call by some Indians on social media to boycott the Maldives. This was an attempt by them to puncture the biggest money-maker for the Maldives, the tourism industry. Meanwhile, Maldivian President Mohamed Muizzu strengthened ties with one of India’s rivals, China. Just a few days after tensions between the Maldives and India flared up, Mr. Muizzu visited China, met with Chinese President Xi Jinping, and appealed to Chinese tourists to visit his nation in large numbers and reclaim the top spot in tourist arrivals, which they once held.

Chart 1 | The chart shows the number of tourists who visited the Maldives in the first 35 days of 2023 and 2024.

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While the number of Indian tourists visiting the Maldives has declined marginally, Chinese tourists have swifty filled this gap, resulting in an overall increase in tourist inflows, data show. The number of Indians who visited the archipelago dropped marginally from 21,460 to 16,895 in the period considered. It is important to note that the decline cannot be entirely attributed to the boycott call as a considerable share may also have dropped their plans fearing repercussions of the ongoing row, among other reasons. Moreover, the number of Russian tourists also decreased from 26,305 to 22,577 in the period, so India is not an outlier.

Data Point: How the Maldives plans to use China to reduce its dependence on India

The decline in Indian visitors did not have an impact on the overall number of tourists to the Maldives. In fact, if the first 35 days of 2023 and 2024 are compared, the number of tourists went up slightly from 1,97,252 to 2,22,502. This increase is entirely due to the sudden surge in the number of Chinese tourists from just 6,563 to 25,303 in the period.

Chart 2 | The chart shows the number of medical tourists from the Maldives who visited India for treatments.

More worryingly, the impact of the diplomatic fallout has been felt by more than just the tourism industry. Generally, 20,000 to 40,000 medical tourists from the Maldives visit India annually for treatment (Chart 2). On January 13, Mr. Muizzu announced that the government’s health insurance scheme will cover visits to the UAE and Thailand too, to “diminish reliance on a select group of countries”. He made this announcement immediately after his return from China. He also said that a 100-bed hospital with Chinese aid will be built.

Mr. Muizzu and Mr. Xi signed key agreements, including agricultural schemes that would “end its [Maldives’] dependence on one country for imported staple foods such as rice, sugar, and flour,” by growing them locally. Currently, the Maldives relies heavily on India for a number of products.

Chart 3 | The chart shows the value of commodities imported by the Maldives from India, between 2019 and 2021, in $ (vertical axis). On the horizontal axis, India’s share (%) in the Maldives’s total imports, across commodities is depicted.

The Maldives imports over 95% of its granite, 40% of its steel bars and coils, over 30% of tubes/pipes, electric motors and cement, 65% of flat-rolled iron and stainless steel sheets, and over 50% of bulldozers from India (Chart 3). Moreover, it sources over 80% of rice, 60% of eggs, close to 30% of cattle meat, 50% of onions, melons and nuts, 25% of wheat, over 45% of crabs/shrimp/prawns and cabbages, and 40% of tomatoes from India. Essentially, the tourism boom in the Maldives — from food to stay — relies heavily on the supply of raw materials from India.

Chart 4 | The chart shows the value of commodities exported by India to the Maldives in $ (vertical axis) and the Maldives’s share in India’s total exports (horizontal axis).

India exports 70% of its cabbages/cauliflowers, over 20% of eggs, over 10% of its melons and live animals and nuts to the Maldives. The archipelago’s key agreements with China after the fallout with India threatens this mutually beneficial relationship, and gives China more sway in the Indian Ocean region.

Source: UNcomtrade portal, India Tourism Statistics, Republic of Maldives’s Ministry of Tourism

vignesh.r@thehindu.co.in, sonikka.l@thehindu.co.in

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