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Located at the crossroads of vital Indian Ocean shipping lanes linking the Middle East and Asia, the Maldives has emerged as an unlikely but increasingly important foothold in Indo-Pacific strategic rivalry. Despite having less than 600,000 residents and limited naval capacity, the country’s geographic position, economic ambition, and diplomatic agility have made it a valuable partner for major powers. Malé is attempting to actively shape its strategic environment by securing investments, courting diverse partnerships, and raising its regional profile. For China, India, the United States, and others, access to Maldivian territory or association with its leadership enhances their ability to operate in this strategic corridor.
In the current contested Indo-Pacific environment, small states can gain relevance not through power alone but by leveraging their location and resources to advance national interests. The Maldives illustrates how such states can assert themselves by engaging regional powers on favorable transactional terms. This contrasts with other small island states which have been less effective in their strategy. The Solomon Islands, for example, faced intense backlash and domestic protests after signing a controversial security pact with China in 2022, which critics argued could enable Chinese military access to the islands. The resulting domestic unrest and deterioration of relations with Australia and the United States demonstrate the risks of perceived alignment with a single great power. The Maldives, by contrast, has managed to position itself more deftly with a multi-vectored foreign policy, selectively aligning with competing powers to pursue certain strategic interests. This is distinct from Cold War-era non-alignment, which sought equidistance or neutrality. It also has some subtle differences from hedging, which often seeks to delay commitment or obscure intent to preserve long-term flexibility.
While the jury is still out on how successful this policy will be, Malé seeks diversified engagement from multiple parties. These investments offer benefits in the form of new infrastructure, tourism revenue, global finance, and trade connectivity. On the flip side, it also opens the door to undue influence in domestic policies, dependency, and long-term debt obligations, something all too familiar in the neighborhood. However, Malé’s emerging success stems from its ability to leverage competition while avoiding overcommitment on any single great power.
Beijing’s Maritime Silk Route: Strategic Depth or Debt Trap?
The Maldives has become a key link in China’s Maritime Silk Road, part of the broader Belt and Road Initiative and accelerated Chinese investment over the past decade. Among the most prominent projects is the Sinamalé Bridge, also known as the China-Maldives Friendship Bridge, completed in 2018 at a cost of $300 million and financed through grants and concessional loans from Beijing. The bridge physically connects the capital Malé to Hulhulé Island, home to the country’s main international airport. Chinese firms also funded the expansion of Velana International Airport, including a new runway and a seaplane terminal to support the Maldives’ luxury tourism sector. Although framed as commercial, the project, among others, has drawn scrutiny over its potential dual-use implications.
Chinese companies have also led massive land reclamation projects in Thilafushi, developing a 150-hectare artificial island for industrial and residential use. The techniques mirror those used in the South China Sea to transform reefs into strategic outposts, raising questions about the intent of the project. In 2024, China signed a military assistance agreement with the Maldives to provide non-lethal defense equipment and training, a move that raised eyebrows in both Washington and Delhi. However, unlike the opaque security pact signed with the Solomon Islands in 2022, the Maldives-China agreement is much more limited in scope, excludes basing rights, and remains subject to greater institutional oversight.
Despite these investments and a generally friendly arrangement with China, Malé has still approached Chinese capital with caution. For one, Maldivian officials have the privilege of hindsight to learn from the mistakes of Sri Lanka, which became heavily indebted to China after an infrastructure boom in the 2000s. When Colombo defaulted on its loans, it was forced to lease the Hambantota Port to a Chinese state-owned enterprise for 99 years in a debt-for-equity swap. As the Maldives’ total debt continues to rise and two major loans to China and India approach maturity over the next decade, concerns about debt distress are not unfounded. However, Maldivian leaders have taken some calculated steps to avoid repeating Sri Lanka’s mistakes including pursuit of bilateral debt management strategies, an emphasis on grant-based funding, and expanded parliamentary oversight of foreign loan agreements. Additionally, the Maldives’ largest upcoming repayment, a $500 million Islamic sukuk due in 2026, is interest-free and held across a diversified pool of investors, reducing the risk of political leverage by a single party. Nevertheless, China still holds roughly 40 percent of the Maldives’ external debt, around $1.37 billion, underscoring the high stakes of its economic strategy.
India’s Counterbalancing: Cultural Depth, Political Friction
India, the Maldives’ traditional regional partner, has responded to China’s growing presence with its own surge in investment and diplomacy. The centerpiece is the Greater Malé Connectivity Project, a $500 million initiative consisting of a bridge, causeways, and roads linking Malé to three neighboring islands. Funded by a $100 million grant and a $400 million line of credit, the connectivity project is India’s largest-ever infrastructure investment in the Maldives. India has also contributed $220 million to the Addu City Reclamation and Shore Protection Project and provided grants to expand ferry services and maritime connectivity across islands. Additional projects include investments in Hanimaadhoo International Airport, over $100 million in water and sanitation upgrades, and support for education, medical aid, and technical training.
These efforts have expanded India’s footprint across key sectors, reinforcing its role as a development partner. Yet India’s proximity and visibility are a double-edged sword. Longstanding defense cooperation, including maritime surveillance support and military hardware donations, has drawn scrutiny from nationalist segments of Maldivian society. During President Abdulla Yameen’s tenure from 2013 to 2018, ties with India deteriorated amid accusations of overreach, a sentiment that resurfaced with the revival of the “India Out” campaign under President Mohamed Muizzu in 2024. Critics seized on the presence of 89 Indian personnel operating a Dornier aircraft gifted to the Maldives as evidence of infringed sovereignty.
Tensions escalated further in January 2024, when derogatory social media posts by Maldivian officials targeting Indian Prime Minister Narendra Modi sparked public outrage in India. Calls for a boycott of Maldivian tourism followed, with Indian media and politicians promoting India’s Lakshadweep islands as an alternative destination. These disputes were not confined to elite diplomacy — they tapped into broader Maldivian concerns over India’s approach toward the country. While some Maldivians welcome India and the longstanding ties, others view it as a regional “bully,” exploiting historical and cultural links to exert outsized influence over domestic affairs.
Nevertheless, despite concerns that Muizzu’s administration would pivot decisively toward Beijing, ties with Delhi began to stabilize following his October 2024 state visit there. The two sides adopted the bilateral India–Maldives Vision Document, which focused on economic recovery and maritime security. India also extended a $760 million financial support package to help the Maldives address its foreign exchange crisis. By May 2025, high-level talks were underway to implement the agreement and deepen defense cooperation, signaling that earlier concerns about a strong pro-China pivot and strategic distancing from India may have been overstated.
Overall, India remains a vital partner to the Maldives and relations remain robust despite periodic diplomatic frictions. Many Maldivians continue to express unease over the perceived asymmetry in the relationship. However, Malé’s ability to stabilize ties with Delhi while managing these domestic sensitivities reflects one dimension of its broader multi-alignment strategy of engaging major powers without appearing beholden to any single actor.
Washington’s Footprint: Quiet Power, Lasting Presence
Unlike India and China, the United States has adopted a lower profile but strategically important approach. In 2020, Washington and Malé signed a Defense and Security Relationship Framework, the first formal military agreement between the two countries. This milestone was followed by the opening of the first U.S. embassy in the Maldives and the full-time reestablishment of the Maldivian embassy in Washington in 2023, signaling deepening institutional ties.
High-level diplomacy has reinforced this relationship. In November 2023, President Biden dispatched senior officials to attend President Muizzu’s inauguration. In June 2024, Secretary of State Antony Blinken hosted Maldivian Foreign Minister Moosa Zameer in Washington, publicly reaffirming shared commitments to maritime security, economic resilience, and a free and open Indo-Pacific. Defense cooperation has also expanded. The United States donated patrol boats, funded hydrographic surveys, and enhanced maritime surveillance capabilities to help Malé protect its vast Exclusive Economic Zone. Training provided by the U.S. Army’s 5th Security Force Assistance Brigade also supported the Maldives National Defence Force. Maldivians are also a notable presence in U.S.-led courses, including professional military education and executive education programs. From Malé’s perspective, Washington is a lower-risk partner that is technically capable and focused on strategic cooperation without overstepping into domestic affairs.
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Diversifying Beyond the Big Three
From the perspective of the Maldives, each major power offers different benefits and constraints. China brings capital and construction capabilities but also opacity. India provides rapid delivery, cultural and historical ties, and education assistance, but is a source of domestic friction. The United States offers security and professionalization but limited economic investment. As a result, Malé is not choosing sides, it is diversifying.
To guard against overreliance on any one power, the Maldives has pursued a deliberate diversification strategy beyond the big three regional powers that makes it distinct from other small states. In 2025, it announced the Maldives International Financial Centre, a planned $8.8 billion offshore finance hub. Backed by Qatari and Emirati investors and developed by a Dubai-based firm, the Centre, in its own words, aims to attract global capital through zero corporate tax, residency waivers, and liberalized financial policies. The goal is to make the Maldives a business environment geared toward digital nomads, entrepreneurs, and high-net-worth individuals seeking low-tax jurisdictions. The Centre represents a bold effort that sets the Maldives apart in its attempt to diversify its economy and attract global capital. However, the project’s scale, exceeding the country’s entire economic output, raises serious risks of debt distress and reputational fallout, which could undermine the strategic autonomy Malé has carefully crafted.
The Maldives has also increasingly deepened its ties with other Muslim-majority countries beyond Qatar and the United Arab Emirates, engaging in military training, diplomatic coordination, and development cooperation. Pakistan has provided officer training, joint drills, and high-level defense exchanges. Turkey gifted the Maldives the TCG Volkan, a former Turkish Navy missile-capable fast attack craft, and initiated naval training programs. This growing engagement with Islamic partners reflects Malé’s strategy of embedding itself within multiple economic, diplomatic, and security architectures, reinforced by shared cultural and religious ties, as the Maldives constitutionally defines itself as a 100 percent Muslim nation.
Agency and Risk Amid Constraints: Lessons from a Small State
Malé’s foreign policy approach is grounded in several structural advantages: the highest GDP per capita relative to South Asia, a highly centralized political system, and low internal ethnic and political fragmentation. Foreign policy decisions are largely directed by the President’s Office, with support from a small, technocratic foreign ministry that has cultivated close ties across the Gulf, Asia, and Western capitals. This centralized structure, with roots in its authoritarian past, enables swift diplomatic responses, consistent messaging, and long-term relationship management, traits often absent in larger or more divided democracies like neighboring Sri Lanka. It also allows Malé to recalibrate quickly in response to geopolitical shifts, as seen in the 2024–2025 reset with India.
Still, agency has limits, especially in this current geopolitical environment. Taking on too much debt, misjudging bigger powers’ intentions, or focusing only on short-term gains are all major risks that could throw the Maldives off course. Maldivian officials appear aware of these risks and have taken steps to institutionalize safeguards, such as enhanced oversight, transparency, and diversification, to help avoid a Hambantota-style entrapment. However, given the Maldives’ large external debt burden, this may still not be enough.
As great power competition deepens in the Indo-Pacific, the Maldives offers an interesting case study in small-state agency. Though not yet a widespread pattern, the Maldives exemplifies a nascent trend also visible in places like Mauritius and Seychelles, where small island states are navigating great power competition with greater dexterity. Whether Malé can sustain this balance remains an open question.
Andrea Malji, Ph.D., is a professor at the Daniel K. Inouye Asia Pacific Center for Security Studies, a Department of Defense regional center. Her research focuses on geopolitics and conflict with a regional specialization in South Asia. She received her Ph.D. in Political Science from the University of Kentucky.
The views expressed in this article are those of the author alone and do not reflect the official policy or position of Daniel K. Inouye Asia Pacific Center for Security Studies, the Department of Defense, or the U.S. Government.
Image: Shahee Ilyas via Wikimedia Commons
