Maldivian President Mohamed Muizzu is expected to seek financial aid during a visit to India this week as the island nation faces a financial crisis amid fears of a debt default.
Muizzu’s first official visit follows his election late last year following a campaign focused on the ‘India out’ policy, with a promise to reduce Delhi’s influence.
Since then, relations have been strong between the countries but experts say the visit shows that the Maldives cannot ignore its big neighbour.
The Maldives’ foreign exchange reserves stood at around $440m (£334m) in September, just enough for a month and a half of imports.
Last month, global agency Moody’s downgraded the Maldives’ credit rating, saying “default risks have increased significantly”.
India’s bailout will strengthen the country’s foreign exchange.
Before visiting India, Muizzu chose to go to Turkey and China – his last visit in January was seen as a defiance by Delhi officials as previous Maldivian leaders visited Delhi for the first time after being elected. Around the same time, a row erupted in India after three Maldivian officials made derogatory remarks about Prime Minister Narendra Modi.
“President Muizzu’s visit is a turning point in many ways,” said Azim Zahir, a Maldives analyst and lecturer at the University of Western Australia.
“Most of all, the visit is to see how dependent the Maldives is on India, a dependency that no other country will find easy to fill,” he said.
The Maldives consists of about 1,200 coral islands and atolls located in the middle of the Indian Ocean. The archipelago has a population of about 520,000 compared to India’s population of 1.4 billion.
As a small island nation, the Maldives depends on its big neighbor India for much of its food, infrastructure and healthcare.
Delhi and Male did not officially confirm that the financial package for the Maldives is on the agenda during the visit. But experts believe it will be part of the conversation.
“The key to Muizzu’s visit is to get a number of financial assistance in the form of aid and debt restructuring,” a senior Maldivian organizer, who did not want to be named, told the BBC.
Muizzu is also seeking a “$400m foreign exchange deal requested by the central bank of the Maldives to cover depleted foreign exchange reserves”, he added.
Ratings agency Moody’s also expressed serious concern about the country’s financial situation, saying “(foreign) reserves remain well below the government’s external debt of around $600m in 2025 and over $1bn in 2026”.
The Maldives’ public debt is estimated at $8bn, including about $1.4bn each owed to China and India.
“Despite Muizzu saying repeatedly that China has given the green signal to postpone debt payments for five years, financial aid from Beijing has not yet arrived,” said the Maldivian editor.
With no other country to come to the rescue, it looks like Muizzu is reaching out to India to mend the strained relationship.
“It’s about resetting the tone and negative comments from senior officials of Muizzu’s government that have had a huge impact on Indian tourist arrivals,” Zahir said.
India has long held sway over the Maldives, whose strategic location in its backyard allows it to monitor a significant portion of the Indian Ocean. But Muizzu wanted to change that by getting closer to China.
In January, Muizzu’s administration ordered India to withdraw about 80 troops stationed in the country. Delhi said they were standing by in person and using two rescue helicopters and a Dornier plane they donated years ago.
Eventually, both countries agreed to replace the military with Indian technical personnel operating the aircraft.
A month after he was charged, Muizzu’s administration also announced that it will not renew the hydrographic survey agreement with India that was signed by the previous government to map the sea in Maldivian waters.
A row erupted after three of his deputies made controversial comments about Modi, calling him a “monkey”, a “terrorist” and an “Israeli puppet”.
These comments have sparked an uproar and calls for a boycott of the Maldives on Indian social media. Male said the comments were personal and did not represent the views of the government. Those three ministers were suspended from the Cabinet.
In what appeared to be a subtle criticism of the reaction on Indian social media, Muizzu said at the time: “We are small, but that does not give you permission to abuse us.”
Muizzu’s management also allowed the port call of the Chinese research vessel, Xiang Yang Hong 3, much to Delhi’s ire. Others saw it as a goal to collect data that could – in time – be used by the Chinese military in submarine operations.
However, there was a slowdown in bilateral relations after Muizzu attended Modi’s swearing-in ceremony after he was elected for a third consecutive term in June this year.
In August, the visit of Indian External Affairs Minister S Jaishankar also provided a resumption of bilateral relations.
“Maldives is one of the cornerstones of our ‘Neighbourhood First’ policy,” Jaishankar told Male.
“To paraphrase in the words of my Prime Minister Narendra Modi – for India, the neighborhood is important and, locally, the Maldives is important,” he added.
For Delhi, it is a welcome change as it has recently seen the ousting of the Indian government of former prime minister Sheikh Hasina in Bangladesh and the return of KP Sharma Oli, a frequent critic of India’s policies, as the prime minister of Nepal.
Muizzu has realized that opposing India is not an option and his reasoning is not an excuse. The number of Indian tourists visiting the Maldives dropped by 50,000 last year, resulting in an estimated loss of $150m.
He knows if he doesn’t get funding from India, Maldives might be a lost paradise. That is why his visit to India is important.
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