Indian tourists’ boycott call post Modi visit to Lakshadweep may impact Maldives | Data

A recent diplomatic row between India and the Maldives, sparked by disparaging remarks made by Maldivian ministers on social media regarding Prime Minister Narendra Modi’s visit to Lakshadweep, led to an uproar on Indian social media. The Maldivian government, distancing itself from the comments, suspended the ministers. Concerns arose about potential impacts on Indian tourist arrivals in the Maldives, a vital source of revenue for the island nation. There has been significant growth in the Maldives’ tourism sector, with the number of resorts increasing from 88 to 172, beds for tourists rising from 16,000 to around 60,000, and tourist arrivals increasing from 6 lakh to over 16 lakh between 2006 and 2022. Tourism revenue soared from 1,777 million Maldivian Rufiyaa (MVR) to 10,430 million MVR, marking a 487% rise between 2006 and 2022. Tourism consistently contributes over 20% to the country’s GDP. A blog by the Asian Development Bank emphasized the need for economic diversification in the Maldives, highlighting tourism’s direct and indirect contribution to the GDP. The timing of the ‘boycott’ calls on social media raises concerns for the Maldivian government, as the 2022 data indicate peaks in the number of occupied beds and tourist vessel operations during January-March. Indians have been the largest contributors to Maldives tourism for three consecutive years (2020-2022), forming close to 11% of total arrivals in 2023, second only to Russians. The potential impact of a ‘boycott’ on Indian tourists could pose significant economic challenges for the Maldives.

During a recent visit to Lakshadweep, Prime Minister Narendra Modi shared photos of his trip on social media. Several users responded comparing the islands with the Maldives, located further down south in the Indian Ocean. This became a diplomatic row when three deputy ministers at the Youth Ministry of Maldives — Malsha Shareef, Maryam Shiuna and Mahzoom Majid — also commented on the posts on X making disparaging remarks against India and Mr. Modi. The Maldivian foreign ministry distanced itself from their remarks, saying their personal views did not represent the country’s position. The Maldivian government suspended them.

Meanwhile, the comments led to an uproar on Indian social media, with many claiming that they were cancelling their scheduled trips to the Maldives. Whether this actually has an impact on tourist arrivals in the Maldives is yet to be seen. Indian celebrities also urged people to explore domestic tourist destinations, including Lakshadweep. A former sports minister of the Maldives, Ahmed Mahloof, expressed concern over the row saying “Indians boycotting the Maldives” will hit the country hard.

The strong reaction from the Maldivian government to the statements of the ministers is unsurprising as tourism is a major source of revenue for the archipelago. The number of hotels in the Maldives as well as tourist arrivals have grown significantly in recent years (Chart 1). The number of resorts shot up from 88 to 172, beds for tourists from over 16,000 to about 60,000, and tourist arrivals from 6 lakh to over 16 lakh in the period.

Chart 1 shows the number of resorts (including marinas), number of beds for tourists, and tourist arrivals between 2006 and 2022.

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Chart 2 shows tourism revenue in million Maldivian Rufiyaa (MVR) and the tourism industry’s contribution to the country’s GDP (%) at constant prices between 2006 and 2022.

In this period, the tourism revenue increased from 1,777 million MVR to 10,430 million MVR — a staggering 487% rise. Tourism continues to contribute over 20% of the country’s GDP.