India has significantly increased its financial aid to the Maldives in its latest budget, with analysts calling it an effort to “outdo and outwait” China’s influence in the region.
In the country’s 2025 national budget released on Saturday, the Maldives received an allocation of 6 billion rupees (US$69 million), up from 4.7 billion rupees last year, marking the biggest increase among South Asian beneficiaries.
India initially earmarked 6 billion rupees for the Maldives in its budget last year, but that sum was later cut to 4.7 billion rupees amid a diplomatic chill triggered by derogatory remarks against Prime Minister Narendra Modi by Maldivian officials.
Bilateral ties reached a low point in November 2023 when Maldivian President Mohamed Muizzu, who campaigned on an “India Out” platform, ordered New Delhi to withdraw 89 troops operating and maintaining two Indian-gifted helicopters and one fixed-wing aircraft, citing concerns over national sovereignty.
Nilanthi Samaranayake, an adjunct fellow at the East-West Centre in Washington, said India and the Maldives had been able to mend ties in recent months, in large part by reaching a compromise on the aircraft issue.
