Behind Muizzu’s Maldives invite to Indians: falling tourism revenue, numbers

Tourism is the largest industry in the Maldives, directly contributing close to 30% of GDP and generating more than 60% of foreign currency earnings. The decline in tourist arrivals from India over the last one year — in the wake of the Lakshadweep-Maldives controversy that caused a diplomatic strain — has had a significant impact on the island nation’s earnings, which industry estimates peg at about $60 million.

Not only in peak season, when Maldives also gets a lot of European tourists, Indian tourists are a key source of revenue during the off-season as well, travel industry experts say. A couple of months ago, Maldives Tourism Minister Ibrahim Faisal, during his India visit for a roadshow titled “Welcome India”, presented a stark contrast to the “India Out” campaign that Muizzu had embarked upon ahead of Maldives elections in November last year. Faisal urged Indians to contribute to the country’s tourism, frankly stating that their economy was dependent on it.

On the day Muizzu’s India visit was announced, two of his ministers — Malsha Shareef and Mariyam Shiuna — suspended in January for derogatory comments against PM Modi, resigned from the government citing personal reasons.

Muizzu’s call to Indian tourists to visit Maldives — the first such statement by him after his ministers triggered a controversy following PM Modi’s visit to Lakshadweep — is also being seen as a policy shift at a time when the island nation is facing an economic crisis.

Three Maldivian deputy ministers had mocked India’s decision to expand tourism in Lakshadweep, triggering an outrage, following which thousands of tourists cancelled their planned trips. Later, the Maldives Foreign Ministry distanced itself from their remarks, saying they did not represent the views of Male.

PM Modi and President Muizzu, via weblink, witnessed a live transaction using the RuPay card in the Maldives, another initiative expected to ease payments for Indian tourists visiting the island nation, thereby boosting its tourism sector. The card is expected to simplify transactions for Indian tourists.

India was the biggest source market for tourism to the Maldives in 2023, accounting for over 11% of the 1.8 million tourist arrivals. However, the impact of the controversy started to show a negative impact, with India ranking at No. 6 in July 2024, registering 71,381 travellers, a 42.5% drop from the previous year.

Data released by the Maldives tourism ministry shows that Indians numbered only 28,604 in the April to June quarter this year, compared to 54,207 in the same period last year. Meanwhile, China claimed the top spot with 1.2 lakh tourists in the first six months of 2024. Indians, on the other hand, were only 63,450.

When the Lakshadweep controversy broke, Indian travel tech company EaseMyTrip announced that they “indefinitely suspended all travel bookings to the Maldives”. Last Friday, as Muizzu’s India visit was announced, EaseMyTrip resuming bookings to the Maldives.