President Dr. Mohamed Muizzu has assured India that the “Maldives will remain a true friend” after securing a financial lifeline during his maiden state visit to New Delhi.
Delivering a press statement after meeting with Prime Minister Narendra Modi on October 7, Muizzu expressed gratitude to the Indian government for offering a bailout to help avert a debt crisis, and lauded India as the “first responder” that has “stood by the Maldives during our times of need.”
A currency swap agreement announced after official talks between the leaders “will be instrumental in addressing the foreign exchange issues we are currently facing,” Muizzu said, noting “a shared commitment to remain engaged on further measures that will bolster the Maldives’ economic resilience and stability.”
Under the swap arrangement, the Maldives central bank will be able to draw up to $400 million against the Maldivian Rufiyaa in addition to 30 billion Indian rupees separately for business transactions in local currencies instead of U.S. dollars.
“The USD/EUR swap facility will support the foreign exchange liquidity requirements. The [Indian rupee] swap facility will allow trade settlement in local currency, which will further enhance and strengthen the bilateral trade between both countries,” the Maldives Monetary Authority explained.
India’s financial support will shore up depleted foreign currency reserves and alleviate a severe U.S. dollar shortage. It comes after credit ratings agencies Fitch and Moody’s downgraded the Maldives over a high risk of defaulting on massive debt payments. The country’s gross international reserves stood at $322 million at the end of September, barely enough to cover imports for a month and far short of debt service needs of about $700 million in 2025 and over $1 billion in 2026.
Muizzu also thanked India for the rollover of $100 million worth of T-bills through the State Bank of India in May and September — a concession granted amid efforts to repair strained ties — and invited Modi on a state visit to the Maldives next year to commemorate the 60th anniversary of formal diplomatic relations.
After bilateral talks, the two leaders unveiled “A Vision for Comprehensive Economic and Maritime Security Partnership,” backed the conclusion of a Free Trade Agreement, and oversaw the exchange of several Memorandums of Understanding.
The ceremony featured the virtual launching of the RuPay card in the Maldives as well as the virtual inauguration of 700 housing units in Hulhumalé and an airport runway in Hanimaadhoo. Both projects had been completed with financing from India.
In his remarks, Prime Minister Modi pledged support for the development of a new commercial port, an agriculture zone and a fish processing facility.
But back in the Maldives, Muizzu came under fire over his apparent U-turn from an anti-India stance with a pro-China tilt after assuming office in November 2023.
On social media, opposition supporters shared photos of Muizzu at “India Out” protests during the former Maldivian Democratic Party (MDP) government. They dredged up posts from current government officials and ruling party lawmakers who had accused the MDP of undermining Maldivian sovereignty and national security by planning to open an Indian consulate in Addu City, signing a hydrography agreement, and undertaking a project to develop a naval dockyard.
According to the “Vision Document” adopted during Muizzu’s visit, the current Maldivian government has also agreed to open an Indian consulate in the southernmost atoll, seek Indian support on “hydrographic matters,” and complete the military harbor at Uthuru Thila Falhu (UTF) with India’s assistance. It was further agreed that India will provide radar systems and “support Maldives with provisioning of defense platforms and assets.”
The continued cooperation with India “demonstrates that the [ruling coalition’s] rhetoric during the election was nothing but fear-mongering,” MDP Chairman Fayyaz Ismail declared on X, recalling how the Addu consulate and infrastructure projects had been “portrayed by the leaders of the current government as a colonization plan.”
He called for government officials to be “held accountable for the damage caused due to the blatant lies made in their bid for power.”
Abdulla Shahid, the MDP’s president, hailed the government’s “positive consideration” of the Addu consulate and UTF projects “despite their supposed objections while in opposition.”
“What we are seeing is the current administration coming to the realization that international relations cannot be conducted based on lies and deceit. What we are seeing is the administration’s naivety and inexperience in diplomacy,” the former foreign minister contended.
On the right of the political spectrum, former Home Minister Umar Naseer accused Muizzu of “treason” for “sitting in their lap and coming back after signing everything they showed.”
But former President Mohamed Nasheed welcomed the normalization of ties. “We should always remain friends. So happy to see things fall into place and the relationship fixed,” he posted on X.
As part of the ongoing five-day visit, Muizzu also addressed the India-Maldives Business Forum in New Delhi and met with Indian President Droupadi Murmu. On October 8, Muizzu and First Lady Sajidha Mohamed traveled to Mumbai, where the Maldives delegation was “scheduled to engage with industry personnel in the tourism and business sectors in India’s business capital.”
Last week, the thawing of Indo-Maldives relations prompted India’s EaseMyTrip to resume bookings to the southern neighbor. The online travel aggregator had suspended bookings in January amid a diplomatic row sparked by derogatory remarks from three Maldivian deputy ministers against Prime Minister Modi.
On the day that Muizzu’s visit to India was announced last month, two of the deputy ministers — Malsha Shareef and Mariyam Shiuna — resigned after eight months of suspension with pay.
A boycott campaign triggered by their tweets is estimated to have caused a revenue loss of $150 million. As of September 30, tourist arrivals from India stood at 90,402, down sharply from 149,587 Indian tourists during the same period last year.
Muizzu’s visit reflects “a realization of how dependent the Maldives is on India, a dependency that no other country will find easy to fill,” Azim Zahir, a Maldives analyst and lecturer at the University of Western Australia, told the BBC.
Indrani Bagchi, chief executive of the Ananta Centre, a New Delhi-based think-tank, echoed the sentiment. “There has also been a better realization of the actual role India plays inside the Maldives, including a fairly large humanitarian role—something which cannot be replicated by any other power,” she told the Financial Times.