India has agreed to provide substantial financial assistance to the Maldives, aimed at bolstering the island nation’s weakening economy. This development comes after Maldivian President Mohammed Muizzu’s talks with Indian Prime Minister Narendra Modi during his five-day visit to India.
The support package includes a $400 million currency swap deal, along with an additional 30 billion rupees ($357 million) in another swap agreement. This financial arrangement will enable businesses in both nations to conduct transactions using their local currencies, reducing dependency on the US dollar.
A New Chapter in Bilateral Relations
President Muizzu was welcomed with red carpet treatment, marking a shift in relations that had soured in recent months. Prime Minister Modi hailed the visit as a new chapter in ehnacing ties between the two countries, emphasizing India’s ongoing commitment to the prosperity of the Maldivian people.
"India will always be there for the progress and prosperity of the people of Maldives," Modi stated, signaling a notable improvement in diplomatic relations since Muizzu assumed office in November 2023.
Economic Concerns Drive Reconciliation
During the visit, Muizzu held extensive discussions with Modi to outline a roadmap for future collaboration. He expressed gratitude to India, stating that the financial support would be instrumental in addressing foreign exchange issues. Both nations also agreed to commence talks on a potential free trade agreement, a move that could further cement economic ties between them.
India’s Crucial Role in Maldives’ Fiscal Stability
Ahead of his talks with Modi, Muizzu told the BBC that he was optimistic about India’s continued support. "India is fully cognisant of our fiscal situation, and as one of our biggest development partners, will always be ready to ease our burden," Muizzu said.
This conciliatory tone contrasts with his previous policies, which appeared to distance the Maldives from India in favor of closer ties with China.
While the Maldives continues to engage with China receiving $1.37 billion in loans from Beijing. Muizzu has rejected being labeled as pro-China, asserting that his policies prioritize Maldives First.
Nevertheless, India had expressed its displeasure earlier this year when the Maldivian government allowed a Chinese research ship to dock, an act seen by some as a mission to collect data for potential Chinese military use.
Muizzu’s visit to India and the resulting agreements mark a significant shift in regional geopolitics, with both countries looking to move past recent tensions and work toward mutual economic growth.
With inputs from agencies
Image Source: Multiple agencies
© Copyright 2024. All Rights Reserved Powered by Vygr Media.
