Maldives President Seeks Debt Relief from India: What It Means for Bilateral Relations
There are very substantial debts taken out from India because of the conditions we inherited. According to Muizzu, this is why we are having talks to consider leniencies.
President Mohamed Muizzu of the Maldives adopted a conciliatory stance after his remarks disparaging India, referring to it as their closest partner. Muizzu implored New Delhi to release the archipelago nation from its debt.
By the end of the previous year, the Maldives owed India $400.9 million. Following his oath of office in November of last year, the pro-China leader of the Maldives has taken a tough stance against India. Within hours, he ordered that Indian military personnel operating three aviation platforms return to their home country by May 10.
In his first interview with the local media on Thursday since taking office, Muizzu stated that India has carried out the most projects and has played a significant role in helping the Maldives. He stressed that there was no doubt about India’s continued status as the Maldives’ closest ally, as reported by the Maldives news portal Edition.mv in an article that featured extracts of Muizzu’s interview to its sister magazine Mihaaru in the Dhivehi language.
Following the first wave of Indian military personnel departing the island nation this month per schedule, Muizzu made remarks in which he praised India. Muizzu had by May 10 ordered the evacuation of all 88 military personnel who were stationed at the three Indian aviation sites. For the past few years, India has been employing two helicopters and a Dornier aircraft to provide humanitarian and medical evacuation services to the people of the Maldives.
The Maldives is strategically vital because of its close proximity to India—it is just 300 nautical miles from the western coast of the continent and barely 70 nautical miles from the island of Minicoy in Lakshadweep—as well as because it is situated at the intersection of commercial sea lanes that traverse the Indian Ocean Region (IOR). Muizzu urged India in the interview to allow debt relief measures for the Maldives in exchange for the Maldives repaying large loans taken out under successive regimes.
Due to the circumstances we inherited, significant loans have been obtained from India. As a result, we are having talks to investigate offering these loans some leeway in terms of payback. I see no cause for any ill repercussions (on Maldives-India ties), thus instead of stopping any ongoing projects, we should move forward with them quickly, Muizzu continued.
Muizzu’s accommodative remarks toward India were made prior to the Maldives’ scheduled mid-April parliamentary elections. According to him, the Maldives has taken on large loans from India that are more than the country’s economy can handle. As a result, according to the news source that quoted him, he is currently talking with the Indian government about ways to return the debts as best as the Maldives can financially.
Muizzu stated that he has thanked the Indian government for their assistance and expressed the hope that India would support debt relief measures in the repayment of these debts. The entire amount of loans obtained from the Export and Import Bank of India (Exim Bank) during the previous administration, led by pro-India leader Ibrahim Mohamed Solih, was USD 1.4 million (MVR 22 million).
In addition, he stated that by the end of the previous year, the Maldives owed India MVR 6.2 billion. This is about USD 400.9 million at the current exchange rate of 1 MVR to USD 16. This is about USD 400.9 million at the current exchange rate of 1 MVR to USD 16.
During our conversation, I also told Prime Minister Modi that I had no intention of stopping any ongoing initiatives. Rather, he remarked, “I conveyed my intention to fortify and accelerate them,” alluding to his conversation with Prime Minister Narendra Modi in Dubai during the COP28 conference that took place there in December 2023. In response to a query on Indian military soldiers in the Maldives, Muizzu stated that this was the only issue that India and the other country had ever disagreed on. He also claimed that India had acknowledged the situation and committed to removing the military personnel.
He asserted that he had not done anything or said anything that would sour relations between the two nations, but it is not polite to write off or discard aid from one nation to another as worthless.