An Indian Neighbor in Chinese Pocket

China and Maldives have agreed upon Free Trade Agreement.

 

Xi Jinping and Abdulla Yameen review an honor guard before talks

India’s leverage over its credentials in the region has hit a robust hurricane, as Maldives entered into a Free Trade Agreement (FTA) with China. Maldives as compared to any other state of the region, is least populated and has a low GDP. President Abdulla Yameen’s visit of four days to China has earned them the rank as it became the second Asian country to hold an FTA with China, while Pakistan being the first. The axis started when Chinese President Visit Maldives in September 2014. Coupled with the fact, that China secured Male’s accord to be a member in China’s one-belt, one-road initiative. Al though, this affected Indian claims and insecurities over the project.  

On December 7, 2017 Maldives and China engaged into FTA as well as promised more cooperation and bilateral terms in the areas of health, tourism, technology and education.

Maldives holds a crucial position in demography. An islet of 1200 Islands in Indian Ocean, Maldives has a sound strategic influence and importance to the world. For instance, from its proximity, the two-third of world’s oil passes. Additionally, it is just 1200 km away from Indian mainland. Consequently, the agreement will bring China to sit on the most extensive and busiest sea route. Meanwhile, China holds the same strategy with Sri Lanka and Pakistan.

In fact, Maldives got independence from Britain in 1965 as their colonial state. India was a key player in Maldives economy and growth until former President Muhammad Nasheed, a key ally of India was forced to resign in 2012. India has played crucial role in ensuring political stability in Maldives.

On the other hand, Male was never a priority for Beijing until the visit of President of China. China assisted infrastructure and tourism expansion in the country. The FTA will definitely, increase the Chinese role in Maldivian economy. Reportedly, in a Chinese statement, both countries will reduce their tariffs up to 90% which used to be zero earlier.   

 

Leaders of the nations with their wives

Maldives is hopeful that the FTA will expand the fishing industry. The Chinese markets will target the production made by Maldivian producers. Additionally, China is willing to open “world’s largest consumer market” to Maldivian fish.

Indian security analysis have pursued and even warned the Maldivians that the FTA is a trap and will further put them under Chinese debt. Consequently, their country will be exposed to Chinese pressure and demands. Thereupon, the pressure will accumulate a Chinese naval base in Maldives.

Meanwhile, the fear deepened when the country passed the law for foreigners to own land in Maldives.Al though, this law is not for a specific country but it is expected that Chinese will have more perks from this from any other state. Furthermore, the land can be owned so there is the probability that China may initiate a naval base over the site.

For Indian concerns, Maldives Foreign Minister dispatched to New Delhi and repeated that claims that India is and will be a top concern for Maldives. He added that his country is having firm bilateral ties with India.