I Geo-Economics & ChokepointsSouth Asia
ORF: India lost the Maldives port but kept its leverage in credit
- Institution
- Observer Research Foundation (ORF Expert Speak)
- Author
- Aditya Gowdara Shivamurthy
- Country · language
- India · English
- Affiliation
- Independent think tank
Summary
In a piece published on 5 November, Aditya Gowdara Shivamurthy of ORF's Strategic Studies Programme traces the story of the Thilafushi port near Malé. The project was awarded to DP World in 2015, then moved to Gulhifalhu in 2018 on the back of an 800 million dollar Indian line of credit. At the end of 2023 President Muizzu shifted it back to Thilafushi and cut India out. China Harbour Engineering Company (CHEC) won the first phase in 2026.
The port is to cover 20 hectares, with more than 650 metres of quay and capacity of 400,000 twenty-foot containers. It aims to cut customs clearance from 1–2 weeks to 2–5 days and to start operating in November 2028; ownership will stay with the state-owned Maldives Port Ltd. According to the author, New Delhi treats the port as a commercial rather than a security matter. Chinese state companies in many sectors work as contractors financed by Malé or third parties, not by Beijing.
Shivamurthy argues that India has built its leverage through finance. Its 150 million dollar treasury bill support has been rolled over several times, and India has absorbed about 45 million dollars in interest. Closing the old 800 million dollar line of credit cut annual debt service from 51 million to 29 million dollars. The 500 million dollar Greater Malé Connectivity Project will link the port to Indian-financed roads whatever happens, and the author sees the election due in under 2 years as a timing factor in India's favour.
Blind spot
The piece reads India's patience as strategy but does not weigh the port's passage to China as a loss. It gives no figures on how far the squeeze on the Maldives' dollar reserves depends on Indian swaps. The author's institution is close to Indian foreign policy, and Malé's own reasoning is conveyed only through official statements.
Talay assessment
Bottom line
The ORF reading shows that when India loses an infrastructure tender in the Indian Ocean, it builds leverage through finance and connectivity projects. The port's first phase is with China, but the access roads and debt service depend on India. The likeliest path is that Malé works with both sides and splits the tender into phases through 2028.
Likely effects
- Indian Ocean portsPositive6 months+
If Thilafushi, with capacity of 400,000 twenty-foot containers, cuts Malé's clearance time from 1–2 weeks to 2–5 days, the Maldives could win a larger share of regional transhipment traffic.
- Maldives debt burdenPositiveWeeks
Closing the old Indian credit line cut annual debt service from 51 million to 29 million dollars, easing pressure on Malé's dollar reserves in the near term.
- India–China rivalryUncertain1–6 months
Because China holds only the port's first phase, later phases remain an open field for bargaining by the United States and India.
Possibilities, ranked
- 1Phased sharing55%
Malé completes the first phase with China and seeks partners from India or the United States for later phases.
Watch: The opening of the Thilafushi second-phase tender and the companies that bid
- 2India returns through finance30%
Additional funding for the port is sought from the new 500 million dollar credit line, and India's share grows.
Watch: A formal funding request for the port from the Maldives to India's EXIM Bank
- 3China's share grows15%
CHEC wins the later phases as well, and Chinese financing comes into play.
Watch: A loan agreement for the port signed with Chinese development banks
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Original publication: orfonline.org · 6 November 2026
This page summarises the institution's view and does not reflect the view of Talay Insight. No direct quotation is used.