In a move that highlights India’s continuing support for the Maldives, India has extended a $50 million budgetary aid to the Maldivian government in the form of a one-year rollover of Treasury Bills (T-bills).
This decision was announced by the Indian High Commission in the Maldives, following the Maldivian government’s request to sustain the much-needed financial assistance. The rollover of the Treasury Bills comes as the second such gesture this year, reflecting India’s commitment to its maritime neighbor and important partner.
The State Bank of India (SBI) subscribed to the $50 million T-bills issued by the Maldives’ Ministry of Finance, marking another year of financial aid that aligns with India’s broader foreign policy objectives in the region.
India’s Ongoing Support to the Maldives
India’s relationship with the Maldives, a key maritime neighbor, has historically been one of friendship and mutual cooperation. The latest extension of the $50 million budgetary support, issued as Treasury Bills, is part of a series of moves aimed at ensuring the Maldives’ financial stability amid economic challenges.
At the core of this partnership is India’s ‘Neighbourhood First’ policy, which emphasizes close cooperation and assistance to neighboring countries. According to the Indian High Commission in the Maldives, “Maldives is India’s key maritime neighbor and an important partner under India’s ‘Neighbourhood First’ policy and Vision SAGAR (Security and Growth for All in the Region).”
This support, characterized by repeated financial aid rollovers, reflects India’s efforts to assist the Maldives in times of economic distress. The previous rollover, which took place in May 2024, saw the same amount of $50 million being provided, highlighting the continuity of India’s backing.
The press release from the Indian High Commission also underlined that India’s assistance goes beyond financial aid. Earlier this year, India extended a special quota for the export of essential commodities to the Maldives, a critical measure to ensure the supply of vital goods to the island nation.
Diplomatic Reactions and Regional Impact
The Maldivian government and political figures have expressed deep appreciation for India’s consistent support. Former Maldivian Foreign Minister Abdulla Shahid lauded India’s decision, calling it a testament to the long-standing friendship between the two countries. In a post on X (formerly Twitter), Shahid described India as a “time-tested friend” and an “unwavering ally,” and expressed gratitude for India’s consideration towards the Maldivian people, despite ongoing economic challenges.
Shahid’s remarks come against a backdrop of evolving relations between the two countries, especially after the inauguration of Maldivian President Mohamed Muizzu.
The new president initially created diplomatic friction by demanding the withdrawal of Indian military personnel stationed in the Maldives, which strained the traditionally friendly ties. However, recent developments suggest that both nations are making efforts to restore and strengthen their relationship.
Muizzu’s government has adopted a more conciliatory tone in recent months, with high-level visits and diplomatic engagements becoming more frequent. This includes the Maldivian Foreign Minister’s visit to India and Indian External Affairs Minister S. Jaishankar’s trip to the Maldives in August, during which several MoUs on capacity building were signed, further cementing bilateral cooperation.
Strengthening the India-Maldives Partnership Amid Regional Challenges
India’s decision to extend financial aid to the Maldives reflects the broader geopolitical strategy of maintaining stability and influence in the Indian Ocean region. With the Maldives being an important partner in India’s Vision SAGAR, continued cooperation between the two countries ensures that New Delhi maintains a strong presence in the region amid growing strategic competition.
India’s support to the Maldives is not limited to financial aid. In addition to the $50 million T-bill rollover, India has been actively involved in various development projects across the Maldives. During Jaishankar’s visit in August, six High Impact Community Development Projects (HICDPs) were inaugurated, which will provide essential infrastructure and services to Maldivian communities.
These projects, alongside capacity-building initiatives, underscore India’s commitment to contributing to the Maldives’ long-term development.
However, the diplomatic ties between India and the Maldives are also marked by challenges. Earlier this year, a diplomatic row erupted after derogatory comments were made by three Maldivian deputy ministers regarding Indian Prime Minister Narendra Modi.
The controversy, which began with viral posts criticizing Modi’s call for developing the Lakshadweep islands as a beach tourism destination, resulted in a strong protest from New Delhi and the suspension of the officials involved.
Despite these setbacks, both nations have shown a willingness to overcome diplomatic hiccups and prioritize their mutual interests. President Muizzu’s subsequent visits to India, including attending Modi’s swearing-in ceremony, signal his government’s intent to keep the bilateral ties on track
India’s extension of the $50 million Treasury Bills to the Maldives serves as more than just financial assistance—it reinforces the deep-rooted partnership between the two nations. As the Maldives navigates through internal economic challenges and external diplomatic dynamics, India’s support remains crucial.
The ongoing cooperation between the two countries, underscored by initiatives such as Vision SAGAR and development projects, ensures that India and the Maldives will continue to be vital partners in ensuring regional stability and growth.
Through this continued support, India not only strengthens its ties with the Maldives but also reaffirms its leadership role in the Indian Ocean, contributing to the prosperity and security of the region as a whole.
