Maldives (Commonwealth Union)_ On the occasion of Independence Day celebrations in Maldives, President Mohamed Muizzu extended his heartfelt thanks to India for its crucial support in easing the Maldives’ debt repayment burden. During the official celebrations on Friday, President Mohamed Muizzu underscored his administration’s commitment to strengthening India-Maldives relations, highlighting aspirations for a free trade agreement (India-Maldives FTA) with India. Addressing the nation, President Mohamed Muizzu praised the Maldives’ foreign policy achievements over the past eight months, which he described as a period of ‘diplomatic success.’ His remarks came amid ongoing negotiations with both India and China to address the country’s economic challenges, particularly the need to alleviate shortages of US dollars.
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In his speech, President Mohamed Muizzu acknowledged India’s significant role in helping to manage the Maldives’ debt repayment. By easing these financial obligations, India has enabled the Maldives to maintain its economic sovereignty. According to local reports, the Maldives owes India approximately 6.2 billion Maldivian Rufiyaa by the end of the previous year. This gesture of support comes at a critical time for the Maldives, which has faced warnings from the International Monetary Fund (IMF) about a high risk of debt distress unless significant policy changes are enacted. To navigate these financial pressures, President Mohamed Muizzu revealed that his administration is pursuing currency swap agreements with both India and China.
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Furthermore, President Mohamed Muizzu’s administration is actively negotiating an FTA with the United Kingdom and is hopeful of achieving a similar agreement with India. This ambition reflects the Maldives’ desire to bolster its economic ties with major global players while also seeking to diversify its trade partnerships. The diplomatic landscape between India and the Maldives has been notably complex in recent years. President Mohamed Muizzu’s administration has previously adopted a more critical stance towards India, particularly during his electoral campaign, which included calls for the removal of Indian troops from the Maldives. This rhetoric had led to a diplomatic row between the two nations, exacerbated by derogatory comments made by Maldivian deputy ministers about Indian Prime Minister Narendra Modi.
However, in a notable shift, President Mohamed Muizzu attended Prime Minister Narendra Modi’s oath-taking ceremony last month, signaling a potential relaxation in the strained India-Maldives relations. This visit, along with the recent withdrawal of Indian troops from the Maldives as requested by President Mohamed Muizzu, marks a significant turn in the bilateral relations. Additionally, he also affirmed that India will remain the Maldives’ closest ally and stressed that there was no doubt about it. Accordingly, the Indian government had responded to the request by establishing a High-Level Core Group to manage the troop withdrawal, which was completed in May. Despite the earlier tensions, which included the Maldives’ decision to not renew the Hydrographic Survey agreement with India and a 33% drop in Indian tourist arrivals to the Maldives this year, the current administration’s actions suggest a move towards reunion. Accordingly, the Maldives’ Defence Minister Ghassan Maumoon’s acknowledgment of the capability of the Maldives’ defense forces to operate the aircraft donated by India further highlights a pragmatic approach to defense cooperation.
As Maldives continues to navigate its economic and diplomatic challenges, President Mohamed Muizzu’s gestures of gratitude towards India and his administration’s efforts to secure favorable trade agreements underscore a pragmatic approach to strengthening international relationships. Additionally, the potential India-Maldives FTA could also significantly benefit the Maldivian economy by enhancing trade and investment opportunities. Furthermore, the evolving dynamics between India and the Maldives reflect a complex yet hopeful path forward, where economic collaboration and diplomatic efforts play crucial roles in shaping the future of bilateral relations.
