Maldivian President Mohamed Muizzu is expected to request a bailout during his visit to India this week, as the archipelagic nation faces an economic crisis amid fears of default.
It is Muizzu’s first official bilateral visit after him voted into power late last year after a campaign centered on an ‘India out’ policy, promising to reduce Delhi’s influence.
Ties between the countries have been strained since then, but experts say the visit shows the Maldives cannot afford to ignore its giant neighbor.
The Maldives’ foreign exchange reserves stood at about $440 million 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.”
A bailout for India will strengthen the country’s foreign exchange reserves.
Before visiting India, Muizzu chose to travel to Turkey and China – his visit to the latter in January was seen as a high-profile diplomatic criticism of Delhi, as previous Maldivian leaders visited Delhi for the first time after being elected. Around the same time, a controversy arose burst out in India after three Maldivian officials made derogatory comments about Prime Minister Narendra Modi.
“President Muizzu’s visit marks a turning point in several respects,” said Azim Zahir, an analyst and lecturer in the Maldives at the University of Western Australia.
“The visit is above all a realization of how dependent the Maldives is on India, a dependency that no other country will be able to easily fulfill,” he said.
The Maldives consists of approximately 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 1.4 billion.
As a small island nation, the Maldives depends on its giant neighbor India for most of its food, infrastructure and healthcare.
Delhi and Male did not officially confirm during the visit that a financial package for the Maldives is on the agenda. But experts think it will be part of the discussion.
“The main priority of Muizzu’s visit is to secure a financial helpline in the form of grants and debt restructuring,” a senior Maldivian editor, who did not want to be identified, told the BBC.
Muizzu also wants a “currency exchange deal worth US$400 million requested by the Central Bank of Maldives to shore up depleted foreign exchange reserves,” he added.
The rating agency Moody’s further expressed serious concerns about Male’s financial situation. proverb that “(foreign) reserves remain significantly below the government’s external debt service of approximately $600 million in 2025 and more than $1 billion in 2026.”
The Maldives’ national debt is approximately $8 billion, included The country owes around $1.4 billion each to China and India.
“Despite Muizzu stating on several occasions that China has given a green signal to delay debt payments for five years, no financial support has come from Beijing,” the Maldivian editor said.
With no other country coming to their rescue, it appears Muizzu is now reaching out to India to mend strained ties.
“It is about resetting the tone and negative rhetoric of senior officials of the Muizzu government, which has had a significant impact on Indian tourist arrivals,” Zahir said.
India has long exerted influence over the Maldives, whose strategic position in its backyard has allowed it to keep an eye on a crucial part of the Indian Ocean. But Muizzu wanted to change that by getting closer to China.
In JanuaryMuizzu’s government issued an ultimatum to India to withdraw about 80 troops in the country. Delhi said they were stationed there to man and operate two rescue and reconnaissance helicopters and a Dornier aircraft that it donated years ago.
Ultimately, both countries agreed to replace the troops with Indian civilian engineering personnel to fly the aircraft.
A month after taking charge, Muizzu’s government also announced that it would not renew a hydrographic survey agreement with India signed by the previous government to map the seabed in Maldivian territorial waters.
Then a row broke out after three of his deputy ministers made controversial comments about Modi, calling him a “clown,” “terrorist” and a “puppet of Israel.”
The comments caused an uproar and calls to boycott the Maldives on Indian social media. Male said the comments were personal and did not represent the government’s views. The three ministers were suspended from the cabinet.
In what was seen as a thinly veiled criticism of the backlash on Indian social media, Muizzu said at the time: “We may be small, but that doesn’t give you the license to bully us.”
Also Muizzu’s government allowed the port call of a Chinese research vessel, Xiang Yang Hong 3, much to the dismay of Delhi. Some saw it as a mission to collect data that could – at a later date – be used by the Chinese military in submarine operations.
Nevertheless, there was a thaw in bilateral ties 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 Foreign Minister S. Jaishankar also gave a boost to bilateral ties.
“The Maldives is one of the cornerstones of our ‘Neighbourhood First’ policy,” says Jaishankar said in Male.
“To put it succinctly in the words of my Prime Minister Narendra Modi, for India, the neighborhood is a priority, and in the neighborhood, the Maldives is a priority,” he added.
For Delhi, it is a welcome change, as it was recently witnessed the ouster of former Prime Minister Sheikh Hasina’s India-friendly government in Bangladesh and the return of KP Sharma Oli, who criticized India’s policies, as Prime Minister of Nepal.
Muizzu has realized that antagonizing India is not an option, and his pragmatism is not without reason. The number of Indian tourists visiting the Maldives fell by 50,000 in the past year, resulting in an estimated loss of approximately $150 million.
He is aware that if he does not get financial support from India, the Maldives could become a paradise lost. That is why his visit to India is crucial.
