Deepshikha Maan, Jadetimes Staff
D. Maan is a Jadetimes news reporter covering Asia
Maldivian President Looks to India for Financial Aid Amid Economic Turmoil
Maldivian President Mohammed Muizzu has expressed confidence that India will extend support to help the island nation navigate its ongoing economic crisis. Muizzu, who is set to embark on a five day visit to India, is expected to request financial assistance amounting to hundreds of millions of dollars as the Maldives faces a potential debt default. With the nation's foreign exchange reserves dwindling to just $440 million, enough to cover only one and a half months of imports, the Maldives is on the brink of severe fiscal instability.
Muizzu highlighted India's role as one of the Maldives' key development partners, stressing that India fully understands the economic challenges the nation faces and is likely to offer solutions to ease the burden. His current diplomatic stance is a notable departure from the rhetoric of his election campaign, which centered on an "India out" policy demanding the withdrawal of Indian troops. Now, Muizzu advocates for resolving any differences through dialogue and mutual understanding, while seeking a financial relief package to shore up the country’s foreign reserves.
Last month, Moody's downgraded the Maldives' credit rating, warning of increased default risks. However, Muizzu dismissed the idea that the country is facing a sovereign debt default and stated that the Maldives would not seek assistance from the International Monetary Fund (IMF), instead relying on its own "home-grown" solutions. Moody's, however, has cautioned that the country's foreign reserves remain insufficient to cover upcoming debt payments of $600 million in 2025 and over $1 billion in 2026. This makes Muizzu's visit to India critical, especially as India has already provided $1.4 billion in support for infrastructure and development projects.
Since assuming office in November 2023, Muizzu has faced strained relations with Delhi. His early diplomatic visits to Turkey and China, particularly his trip to China in January, were viewed as a deliberate snub to India, as previous Maldivian leaders traditionally prioritized visiting India first. Further diplomatic tension arose when three Maldivian officials made derogatory remarks about Indian Prime Minister Narendra Modi, and Muizzu demanded the withdrawal of approximately 80 Indian troops stationed in the Maldives. A compromise was later reached, with Indian civilian technical staff replacing military personnel to operate rescue helicopters and aircraft that had been donated by India. Muizzu's government also chose not to renew a hydrographic survey agreement with India, citing domestic priorities.
Muizzu defended these decisions, stating that they align with the strategic priorities of the Maldivian people, who elected him 10 months ago. He noted that both countries now have a clearer understanding of each other's priorities. Although some of Muizzu’s policies initially appeared to reduce Indian influence in favor of strengthening ties with China, the Maldivian president rejected the notion that he is pro China. He emphasized that the Maldives follows a "Maldives First" foreign policy based on mutual respect, non interference, and the pursuit of peace and prosperity.
Despite efforts to foster closer relations with China, financial aid from Beijing has not materialized, leading Muizzu to pivot back toward India for economic assistance. Analysts suggest that Muizzu's renewed outreach to India is driven by the reality of the Maldives' heavy dependence on India, a reliance that no other nation can easily replace.
