India’s emergency financial support action takes place as there are indications that relations between the two nations are improving after President Mohamed Muizzu’s “India Out” campaign brought him to power in the Maldives last year and he demanded that New Delhi remove more than 85 military personnel stationed there to operate three aircraft.
This is India’s second time of providing the Indian Ocean archipelago with emergency financial support. India has renewed its subscription to $50 million worth of government treasury bills for a year.
The Indian High Commission in Male released a statement stating that the State Bank of India (SBI) had subscribed fifty million dollars of the Maldivian government’s treasury bills for a year starting on September 19, 2024, the date of the previous subscription’s maturity.
In May of this year, the Maldivian government once again requested that the SBI subscribe to $50 million worth of Treasury bills through the same process. According to the statement, these contributions were given specifically at the Maldivian government’s request as “emergency financial assistance.”
According to the statement, “India has assisted the Maldives in times of need and the current subscription of T-bills, along with the government of India’s decision earlier this year of extending special quota for export of essential commodities for the Maldives by one more year reflect India’s continued support to the government and the people of the Maldives.”
Under the “Neighbourhood First” policy, the Indian side also referred to the Maldives as a significant partner and marine neighbor.
In a post on X, Ahmed Adeeb, the minister of tourism for the Maldives, thanked the Indian government for providing “crucial budgetary support” by rolling over $50 million in Treasury bills.
Adeeb stated, “This strengthens our path towards economic stability and growth and the deep bond between our nations.”
The COVID-19 pandemic and the aftermath of the Russia-Ukraine conflict have severely damaged the Maldives’ foreign exchange reserves and revenue streams. As a result, the country is currently experiencing a severe economic depression.