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India Pledges $400 Million Aid to Maldives as Relations Warm

International Desk

  08 Oct 2024, 08:55
Photo: Reuters

India's Narendra Modi government is providing $400 million in assistance to the Maldives government. On Monday (October 7), a currency swap agreement was signed between the two countries in New Delhi.

This marks the first official bilateral state visit of Maldives' President Mohamed Muizzu since taking office. He arrived in India on Sunday (October 6) for a five-day visit and was welcomed with a red-carpet reception.

The purpose of Muizzu’s visit is to repair strained ties between the two South Asian neighbors. On Monday, he met with Indian Prime Minister Narendra Modi, during which he called for strengthening relations between the two nations. After the meeting, Prime Minister Modi stated that India is always the first to respond when the Maldives faces a crisis.

In addition to the meeting with Modi, an agreement was signed for a $400 million currency swap and 30 billion Indian rupees in currency exchange, as per the Maldives' request. Another significant agreement was signed for infrastructure development support in the Maldives.

Currently, the Maldives is facing an economic crisis, with declining foreign currency reserves raising concerns about a potential debt default, putting pressure on the Muizzu administration. India's aid is expected to bolster the country's foreign reserves.

After his meeting with Modi, Muizzu assured that his government would not compromise India's security. He referred to India as a valuable partner and friend of the Maldives, emphasizing that his government will prioritize Indian cooperation in various sectors, including defense.

During his election campaign, Muizzu had promised to reduce India's influence over the Maldives, with the "India Out" policy being a central theme. Even after winning, tensions continued to rise. However, with Muizzu’s message of friendship towards India, analysts are suggesting that the Maldivian president has taken a diplomatic U-turn on the India issue.

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