Maldives India
India's Prime Minister Narendra Modi (R) waves as Maldives President Abdulla Yameen looks on during the closing session of 18th South Asian Association for Regional Cooperation (SAARC) summit in Kathmandu November 27, 2014.Reuters

Last week, the small archipelago nation of Maldives gave its neighbour India jitters after its parliament, Majlis, passed an amendment to the country's law to allow foreign ownership of land for the first time.

The new piece of legislation allows individuals or companies to buy land on the islands provided they invest USD 1 billion and reclaim 70% of the land from the Indian Ocean for their project.

The move by Maldives seems to be yet another step towards strengthening relations with China, despite India being its immediate neighbour and a co-SAARC member.

China has been waiting to seize the opportunity to put its foot in the strategic region that links the east to the west. Professor Mahendra Lama from the Jawaharlal Nehru University in Delhi told IBTimes India that the Chinese government must have already drawn a map of regions where it wants to buy land in Maldives.

China Steadily Built Relations with Maldives Over Recent Years

"Over the last 10 years, China has got a strong foothold in Maldives, while India has not pursued any such transformative relations with Maldives. Unlike India, China has kept itself away from the domestic political rigmarole in Maldives," said Lama, a professor of South Asian Economies at the school of International Studies at Delhi's Jawaharlal Nehru University.

China has also pumped in major investments in Maldives, including in the bridge project connecting the airport and the capital of Male and also helped the archipelago nation's tourism by ensuring that 30 to 40% of the tourists are Chinese, the professor explained.

"From about 35,000 Chinese tourists in Maldives in 2008-09, the figure has risen to 3.5 lakh a year," Lama pointed out.

Maldives also signed up for China's Asian Infrastructure Investment Bank (AIIB) recently.

However, India did not accord the same interest in building its relations with Maldives in recent years despite its historically stronger foothold in the island country.

"We have had only conventional cultural, economic or diplomatic ties and have not been able to create and establish any strong Indian constituencies, and our policy towards Maldives has been heavily government-centric," said Lama.

A recent sore point between India and Maldives was when Indian Prime Minister Narendra Modi cancelled his visit to the island nation in March this year. Speculations were that the cancellation of Modi's trip was connected with the Maldives government's treatment of jailed former President Mohammad Nasheed, who was known to be pro-India.

On the other hand, Chinese President Xi Jinping visited Maldives last year in September and persuaded the Maldives to join the maritime silk route project, which will help China get a strategic position on a route that connects the East to the West, the professor said.

"The cancellation of Modi's visit particularly after it was announced by the Foreign Minister of the island nation, Dunya Maumoon, was a diplomatic faux pas and sent an adverse signal to Maldives," the professor said.

"Another blow for India was when Maldives unceremoniously ousted an Indian company from its airport development project in 2013, which the Chinese have now taken over," Lama added.

Maldives' land ownership conditions designed to China's advantage

Apart from the fact that China is intensely pursuing land projects in Maldives, what gives the country an upper hand on the current law is that it has a history of specialising in land reclamation, the professor said.

"China has shown its skills in land reclamation on several occasions the latest being in the South China Sea and also in Sri Lanka, while India does not have a consistent record of reclaiming land in vast scale. This factor gives an advantage to China to take up land projects in Maldives," he said. 

"Secondly, the fact that land ownership in Maldives requires $1 billion is another advantage for China, as the Chinese government can easily decide to go ahead with the investments, while in India, it will be difficult to get consensus on investing such a huge amount," the professor explained. 

It is also unlikely that an Indian business house would take up a project with such tough conditions, especially of 70% land reclamation. 

It seems the conditions for land ownership in Maldives have been essentially designed to suit Chinese interests," Professor Lama said.

My hunch is that China would have already prepared a map of projects and locations it wants to invest in," he added. 

Unlike in India, China's political system allows it to go the whole hog without bothering about domestic considerations, while in India, there are domestic constituencies and angles to look into before starting a project in a foreign land," the professor said.

"China moves fast and ensures that projects are done in time and within the estimated costs. This is where they get the advantage in a foreign land." he added.

What Should India Do?

It is time for India to be aggressively proactive in rebuilding its relations with the Maldives and other neighbouring countries so as to counter another country's domination within what should ideally be India's sphere of influence.

  • The very first step should be an immediate visit by PM Modi to Maldives.

We have to rebuild our political case for India in Maldives, and it should begin with Modi's visit to the nation.

He should insist on transformative relations and bold actions rather than a mere change and few incremental additions. He could do it like the recent land border agreements with Bangladesh, professor Lama said. 

On Sunday, on the occasion of the Maldives' 50th Independence Day, Modi took the lead to call the nation a "valued partner" of India. 

However, something more than a tweet by the Indian PM is needed to ensure the "strong foundation" does not shake. 

  • Another task for India is to push its business houses to consider land ownership in the Maldives.

"Let the relationship be driven by private players so that India has a diverse set of constituencies in Maldives," the professor said. 

  • One of the most important steps India should take is to diplomatically engage other countries to invest in Maldives.

"Japan and European countries would be the perfect example for this. Japan has a credible and long history of land reclamation," the professor said.

  • Overall, India has to boost its linkages with Maldives in the private sector, trade, academics and culture.

"Maldives is looking for India's support to address its issues of climate change, and India should offer its help through environmental and scientific institutions." 

India and Maldives are more alike culturally and historically, and India should use this to its advantage," the professor said.