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Maldivian President Mohammed Muizzu is in India on a bilateral visit to improve his country’s strained relations and restore the flow of Indian tourists to the island nation.
peppermint sees an increase in the number of outbound Indian tourists and their importance in countries like Maldives.
Are Indian travelers continuing to boycott Maldives?
It seems like. Indian tourist inflows were down 43% in the first six months of 2024, according to data from the island nation’s tourism ministry. India, which was the top source of tourists in 2023, has now dropped to sixth place. Of the 17 lakh tourists who visited Maldives last year, 12% were Indians, but by 2024 this share has halved to 6%.
Read this Mint Explainer: What does Muizzu’s election victory mean for India-Maldives relations?
Anti-India rhetoric in the Maldives has led Indian tourists to visit other destinations such as Thailand, Indonesia, Malaysia, Vietnam and Georgia, as well as domestic destinations such as Lakshadweep.
Has this affected tourism in Maldives?
In absolute numbers, not much. Maldives recorded a 10% increase in tourist arrivals in the first six months of 2024. This was largely due to the resurgence of Chinese tourists, who were the largest number of visitors before 2020. Beyond China, tourists from Russia, the UK, Italy and Germany are among the top five sources of visitors. (see chart)
More here Mint Explainer: What’s behind Maldives’ new defense deal with China?
Maldives aims to welcome more than 2 million tourists in 2024, a milestone for the country. However, the BBC estimated the loss due to the Indians’ boycott at $150 million.
How important is tourism to the island nation?
The Maldives, due to its rich biodiversity (it is home to the world’s seventh largest coral reef) and beautiful beaches, is heavily dependent on tourism, which directly contributes about 30% (approximately 78%) of the country’s GDP. indirectly) and contributes 60%. % of its foreign exchange reserves.
And this Are differences between India and Maldives ending?
The World Bank has warned that the island nation’s heavy reliance on tourism and limited regional diversification makes it vulnerable to macroeconomic shocks.
Did the World Bank’s warning come true?
Yes. The economy of Maldives is in bad shape. The growth rate has fallen below 5% compared to the pre-pandemic level of 7.4%. Revenue from tourism has declined due to a decline in the average length of stay and a decline in tourist spending. The current account deficit has widened significantly due to rising imports, putting pressure on foreign exchange reserves, which fell to $395 million in July 2024, the lowest since December 2016. Fiscal deficit is high and so is public debt.
President Muizu is considering a bailout package including currency swap and debt restructuring during his visit to India.
Why does Muizzu want Indian tourists back?
The return of Indian tourists will boost Maldives’ foreign exchange reserves and support its economy. Furthermore, Muizu recognizes the long-term importance of Indian tourists. India’s outbound tourism is growing faster than any other country in the world. In 2023, more than 28 million Indians traveled abroad, with this number expected to exceed 90 million by 2040.
Recognizing this potential, 27 countries are now offering visa-free entry to Indian travellers, with many visa norms being eased. Belatedly, the Maldives has realized that it cannot afford to mix politics with tourism.
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