Straight Talk | Rebooting Paradise Inc: Why Modi’s Visit Is A Booster Shot For Maldives

Last Updated:July 25, 2025, 11:40 IST

As Prime Minister Narendra Modi sets foot on Maldivian soil now, the entire region watches: can this reset patch up old wounds and bring back the lifeblood of Maldivian prosperity?

The Maldives — archipelago, paradise, icon of luxury. For decades, its white sands and turquoise lagoons have lured the world’s travellers, with Indian tourists forming the foundation of its post-pandemic boom. Yet, not very long ago, a diplomatic spat with India threatened to unravel its greatest success story. As Prime Minister Narendra Modi sets foot on Maldivian soil now, the entire region watches: can this reset patch up old wounds and bring back the lifeblood of Maldivian prosperity?

The Shadow of a Spat

The economic importance of tourism to the Maldives is almost impossible to overstate. It accounts for more than a quarter of GDP and underpins livelihoods for tens of thousands. In recent years, Indian tourists—who overtook even the Chinese in arrival numbers – were the engine of the industry. But at the start of 2024, that engine sputtered.

What sparked the downturn? Sometimes, all it takes is a tweetstorm. After PM Modi visited Lakshadweep – India’s own picture-perfect islands – Maldivian officials responded with a cascade of undiplomatic remarks, some laced with insult. The reaction in India was swift and nationwide. Major travel sites suspended bookings. Indian celebrities, travel influencers and ordinary citizens alike amplified a call for a #BoycottMaldives campaign, redirecting attention – and crucially, holiday budgets – towards Lakshadweep and other domestic destinations.

This hit the Maldives where it hurt most. The Indian market, responsible for more than 200,000 annual visitors in 2023, suddenly dried up – arrivals plummeted, airlines dropped routes, and hoteliers stared at empty rooms.

Lakshadweep: A Strategic Counter and a Symbol

Modi’s Lakshadweep sojourn was not merely a personal vacation but, in the context of the Maldives’ then growing anti-India stance, a calculated signal. Lakshadweep, long overshadowed by the Maldives, was cast into the spotlight as a pristine and viable Indian alternative. PM Modi’s enthusiastic social media posts and his government’s investment in infrastructure and marketing underlined a new message: India had its own paradise to offer, and the nation’s 1.4 billion people could do more with their wallets than just protest from the sidelines.

Travel tech giants like EaseMyTrip made symbolic—even patriotic—stands, halting bookings to the Maldives. In days, Lakshadweep saw a 3,400 per cent surge in travel searches, while local islands in the Maldives turned uncharacteristically quiet. Even India’s trader community joined the boycott, pausing non-essential business with Maldivian partners.

Economic Fallout: A Case Study in Interdependence

For the Maldives, the episode underscored just how symbiotic its relationship with India had become. By mid-2024, Indian visitor numbers had nosedived, pushing India down to sixth place among the Maldives’ tourism source markets. From almost 210,000 Indian arrivals in 2023, the numbers halved within months. For Maldivian resorts and guesthouse downturn meant anxious calls, abandoned tables, and, worst of all, discarded investment plans.

Tourism is deeply embedded in the Maldivian economy; shockwaves travel quickly. With revenues sagging, the government’s ambitious economic targets started looking far-fetched. President Mohamed Muizzu, who had built his campaign on being more independent of India and closer to China, was forced into damage-control mode. Three ministers were suspended, and official apologies flew over the Indian Ocean, but the harm was already felt by thousands of local workers.

From ‘India Out’ to ‘Welcome India’: Why Modi’s Visit Matters Now

PM Modi’s state visit, the first such high-level engagement since the spat, comes with both symbolism and substance. Modi will be the guest of honour at the Maldives’ 60th Independence Day, marking a powerful endorsement of the relationship’s enduring value.

In the lead-up to the visit, both sides have showcased their willingness to recalibrate. The Maldivian tourism ministry launched the “Welcome India” initiative, with new roadshows across Indian metros and airline partnerships to restore direct air links. Plans include appointing an Indian celebrity brand ambassador and developing new tourism products tailored to the Indian market.

Behind the scenes, trade, investment, and financial assistance from India have helped the Maldives avoid the worst, providing crucial balance-of-payments support and funding for major infrastructure. Former President Mohamed Nasheed’s candid admission— “If not for India, we would have gone default”—resonates with investors and policymakers, who know that stability is the foundation of prosperity in an island nation so exposed to global tides.

The Road Ahead: Confidence, Investment, and the Rebirth of Paradise

Rebooting the Maldives as “Paradise Inc.” after a bruising diplomatic row is no overnight task. Consumer confidence, once shaken, can take time to rebuild, especially in the fickle world of high-end tourism. Yet there are reasons for optimism:

• Recovery Signals: Travel companies have resumed Maldives bookings, and Indian arrivals are trending upwards again. The Maldivian government now targets 300,000 Indian tourists in 2025, a bold yet plausible aspiration if current trends hold.
• Renewed Investment: Greater stability and better relations invariably mean a return of investor appetite. With Indian visitors returning, hotel groups, airlines, and allied businesses in both countries are showing renewed interest in capacity expansion and new partnerships.
• Strategic Vision: Both nations appear ready to return to a mutually beneficial model, intertwining tourism with infrastructure development, blue economy projects, and regional security confidence.

The saga of the boycott reveals how quickly trust can be broken – and how hard it is to recapture. For the Maldives, it is a sobering reminder: the paradise economy floats on goodwill, not just turquoise tides. The quick diplomatic reset and Modi’s visit are more than photo-ops; they represent a deliberate effort to reboot this trust. With investor confidence returning and Indian families once again weighing Maldivian holidays, the archipelago’s battered but resilient tourism industry has every chance to set sail anew.

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First Published:

July 25, 2025, 11:40 IST