NEW DELHI (Reuters) – Maldives President Mohamed Muizzu will hold talks with Indian Prime Minister Narendra Modi on Monday during a five-day state visit, hoping for New Delhi’s continuing support as his Indian Ocean nation recovers from an economic crisis.
Concerns have grown in recent months that cash-strapped Maldives could become the first country to default on Islamic sovereign debt but sentiment has improved since China and India, which vie for influence in the strategically located archipelago, extended fresh support lines.
India extended emergency financial support to the Maldives last month by subscribing to its $50 million treasury bill at the request of Muizzu’s government, days after China agreed to strengthen trade and investment in the Indian Ocean nation.
Financial support from New Delhi to revive an ailing economy is expected to top the agenda when Muizzu meets Modi on Monday.
“India is fully cognizant of our fiscal situation, and as one of our biggest development partners, will always be ready to ease our burden, find better alternatives and solutions to the challenges we face,” Muizzu told the BBC ahead of his visit.
Much of the money the Maldives owes is to China and India, which have extended $1.37 billion and $124 million in loans respectively, according to World Bank Data. The fear of Maldives’ default follows a turbulent few years, as COVID-19 hammered the nation’s mainstay tourism industry.
Maldives-India relations were hurt after Muizzu won power in April and demanded New Delhi replace 80 defence personnel it had stationed on the Maldives with civilians as part of his “India out” campaign. But the relationship has been on the mend following diplomatic talks and meetings since.
“Recent developments reflect a positive trajectory in our bilateral relations, and we are committed to fostering a cooperative and mutually beneficial partnership,” Muizzu said in an interview published in Monday’s Times of India newspaper.
(Reporting by Sudipto Ganguly in Mumbai; editing by Raju Gopalakrishnan)
