India extends $50 million budgetary aid to Maldives for another year

NEW DELHI: India has extended budgetary support to the Maldives by rolling over a $50 million Treasury Bill for another year at the Maldivian government's request. The Indian high commission in the Maldives announced this extension on Thursday, facilitated by the State Bank of India (SBI).

The SBI has subscribed to the $50 million government Treasury Bills (T-bills) issued by the Maldives' Ministry of Finance for an additional year, following the maturity of the previous subscription on September 19.

This marks the second such rollover by the Indian government this year, with the first occurring in May. The Indian high commission said, "Earlier in May 2024, SBI had similarly subscribed a $50 mn T-bills under same mechanism, again on the request of the Government of Maldives. These subscriptions have been made at the special request of the Government of Maldives as emergency financial assistance."

The Indian high commission emphasized the significance of the Maldives in India's regional policy, noting, "Maldives is India's key maritime neighbour and an important partner under India's 'Neighbourhood First' policy and Vision SAGAR i.e. Security and Growth for All in the Region."

India has also extended a special quota for the export of essential commodities to the Maldives for another year. The High Commission said, this "reflects India's continued support to the Government and the people of the Maldives."

Maldives' former foreign minister Abdulla Shahid welcomed India's support, calling India a "time-tested friend" and "unwavering ally." He stated, "Delighted to hear that India has subscribed the $50 million T-Bills issued by the Government of Maldives for one more year, as emergency financial assistance. India continues to prove time and time again, that it is a time tested friend, and an unwavering ally, despite this government's mismanagement of the economy and its questionable foreign policy. I thank India for its special consideration extended towards the people of Maldives."

Relations between India and the Maldives faced challenges after President Mohamed Muizzu took office, particularly following his demand for the removal of Indian military personnel from the Maldives. This led to a diplomatic row in January when Maldivian deputy ministers made derogatory comments about Indian Prime Minister Narendra Modi. Although the matter strained ties, efforts have been made to improve the relationship, including several high-level visits.

In August, external affairs minister S Jaishankar visited the Maldives, where he signed agreements on capacity building and inaugurated six High Impact Community Development Projects (HICDPs). He also met President Muizzu and reviewed bilateral relations with foreign minister Moosa Zameer .