Maldives President Muizzu thanks India for debt relief

Maldives President Mohamed Muizzu thanked India for its support in easing the island nation’s debt service and expressed hope for stronger ties, including a possible free trade agreement. Muizzu made the remarks during an official Independence Day function in the Maldives on Friday. In his speech, he praised his government’s foreign policy and celebrated eight months of “diplomatic success”, the Maldives President’s Office said.

President Muizzu expressed his gratitude to both India and China for their support in easing the Maldives’ debt servicing burden, which has helped safeguard the country’s economic sovereignty. He stressed the need to ease local US dollar shortages and noted that the Maldives government is negotiating currency swap agreements with both New Delhi and Beijing.

The Maldives President also announced that his government is negotiating a free trade agreement with the United Kingdom and hopes to reach a similar agreement with India.

Relations between India and the Maldives had deteriorated in recent years, leading to a diplomatic row. However, the Muizzu government has struck a more conciliatory tone since coming to power. Last month, President Muizzu attended the swearing-in ceremony of Prime Minister Narendra Modi, who was taking office for a third consecutive term.

Earlier this year, Muizzu called for debt restructuring measures for the large loans that the Maldives had received from various governments. He stressed that India remains the “closest ally” of the Maldives and said that there is no doubt about that. At the end of last year, the loan amount that the Maldives owed India was 6.2 billion Maldivian Rufiyaa, according to The Edition, a Maldives newspaper.

The International Monetary Fund (IMF) warned earlier this year that the Maldives faces a high risk of debt distress without significant policy changes. President Muizzu has previously used “anti-India” rhetoric and even ran his election campaign on the “India Out” platform, which called for the withdrawal of Indian troops from the country. Since taking office, Muizzu has taken steps that are unconventional from the perspective of India-Maldives relations. For example, he deviated from the long-standing tradition of visiting India on his first official visit and instead went to Turkey, followed by China, where the two countries elevated their ties to a comprehensive strategic partnership and signed about 20 agreements.

Last December, the Maldives announced that it would not renew the Hydrographic Survey Agreement with India. The Muizzu government officially requested India to withdraw its troops, which led to the formation of a High-Level Core Group by the Indian government to discuss the issue. The withdrawal of Indian troops was completed in May this year. Shortly after the withdrawal, Maldives Defense Minister Ghassan Maumoon acknowledged that the country’s defense force was capable of operating the three aircraft donated by India.

The diplomatic row between New Delhi and Malé intensified after three Maldivian deputy ministers made derogatory remarks about Prime Minister Narendra Modi over his photos of a visit to Lakshadweep. PM Modi had called for developing the Indian archipelago as a beach tourism destination and promoting domestic tourism. The issue escalated into a major diplomatic row, with New Delhi summoning the Maldivian envoy and lodging a strong protest over the viral posts. The three deputy ministers were suspended and remain suspended with full pay.

Data from the Maldives Ministry of Tourism earlier this year showed that the number of Indian tourists visiting the Maldives has dropped by 33 percent compared to last year.

(With ANI inputs)

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