By Mohamed Junayd
MALE (Reuters) - The Maldives has cancelled a 2015 law that allowed foreigners to own land in the tropical islands, a move the government said addressed concerns about potential loss of sovereignty.
Maldives, located near busy shipping lanes, has been drawn into a regional contest for influence after China stepped up infrastructure development, prompting a pushback from India, its traditional partner.
In 2015, the parliament controlled by supporters of former president Abdullah Yameen changed the land ownership laws to allow the government to sell land to foreigners ready to invest over $1 billion, so long it was reclaimed from the sea.
No land was actually sold to any foreigner since the law came into effect four years ago.
The move by the pro-China Yameen stoked concern that foreign powers could use such land for military purposes and this week the Maldives parliament moved to repeal the law in line with a campaign promise by President Ibrahim Mohamed Solih who took power last year.
"Land is one of the most valuable resources we Maldivians have and obviously it is limited. It is intrinsically connected to our identity and it is difficult for many to see that identity sold off just like any other commodity," presidential spokesman Ibrahim Hood said on Wednesday.
"The president understands this connection and these sentiments which is why he had pledged to reverse that particular constitutional amendment, Hood said.
Since it assumed office, Solih's administration has sought to rebalance ties with the regional heavyweights China and India. The government has pledged to investigate some of the major deals struck with China by its predecessor and is also trying to determine its financial debt to Beijing.
With the cancellation of the foreign ownership rules, the Maldives reverts to the old law under which land can only be leased to foreigners for 99 years.
Saudi Arabia was also interested in investing in the islands, said Hamid Abdul Ghafoor, a spokesman of the main ruling Maldivian Democratic Party.
(Writing by Shihar Aneez; Editing by Sanjeev Miglani and Michael Perry)