India renews $50 million budgetary assistance to Maldives for another year
Relations between India and the Maldives became rather tense following Maldivian President Mohamed Muizzu coming to power.
India has provided financial aid to the Maldives government for its budgetary support, that is, for the rollover of the $50 million Treasury Bill for one more year on the request of the Maldivian government, the Indian High Commission declared on Thursday.
On behalf of the Maldivian government, the State Bank of India (SBI) has purchased the $50 million government Treasury Bills (T-bills) of the Ministry of Finance of the Maldives for one more year when the previous subscription expired on September 19, as stated by the Indian High Commission in the Maldives in the press release.
This is the second rollover approved by the Indian government this year after the first rollover of the $50 million Treasury Bill back in May. According to the press release, “Earlier in May 2024, SBI had similarly subscribed a $50 million T-bill under the same mechanism, again on the request of the Government of the Maldives.” These subscriptions have been made at the special request of the Government of the Maldives as emergency financial assistance.”
In the press release, the Indian High Commission described the Maldives as India’s proximate maritime neighbor and a valued partner in the implementation of India’s ‘Neighbourhood First’ policy. “Maldives is India’s key maritime neighbor and an important partner under India’s ‘Neighbourhood First’ policy and Vision SAGAR, i.e., security and growth for all in the region,” said the Indian High Commission in the Maldives.
They further added, “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 the 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.”
The former Foreign Minister of the Maldives, Abdulla Shahid, welcomed India’s decision to extend the budgetary support to Male-India. Referring to India Maldives as a ‘time-tested friend’ and ‘unwavering ally’, he thanked the government of India for the special consideration given to the people of his country.
Diplomatic Strain Eases with Budgetary Support and Bilateral Engagements
Abdulla Shahid expressed his views on X and said, “Delighted to hear that India has subscribed to the $50 million T-Bills issued by the Government of the 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 the Maldives. Friendly, cordial relationships with all countries are essential for progress and prosperity.”
Relations between India and the Maldives became rather tense following Maldivian President Mohamed Muizzu coming to power. After the assuming of the presidency, Muizzu reignited delicate diplomatic relations when he called for the eviction of about 88 Indian soldiers from the Maldives. These personnel were repatriated from three aviation platforms and were replaced by Indian civilians by the May 10th deadline that was provided by President Muizzu.
More recently, there has been improvement of relations between the two countries, which became strained in January after three Maldivian deputy ministers made defamatory remarks about the Indian Prime Minister Narendra Modi while on a visit to the Lakshadweep Islands. PM Modi had expressed his wish for the Indian island cluster to be developed as a center for beach tourism and called for promotion of domestic tourism. The matter turned into a huge diplomatic issue as New Delhi recalled the Maldivian envoy and protested strongly against the viral contents. Subsequently, the three deputy ministers were suspended.
After January, numerous actions have been taken by the Muizzu-led government to renew the relationship, such as several diplomatic visits and one of them—the President himself having a trip to India to attend Modi’s swearing-in ceremony or the visit of the Maldivian Foreign Minister.
In the first half of August, the External Affairs Minister of India, S Jaishankar, traveled to the Maldives. The one-day visit of Jaishankar produced MoUs on capacity building and the opening of six High Impact Community Development Projects (HICDPs), stated an MEA press release.
Jaishankar also met with the Maldivian President Mohamed Muizzu and discussed bilateral relations with Foreign Minister of the Maldives Moosa Zameer, the statement also noted. In his encounter with Muizzu, he conveyed greetings from the Prime Minister of India, Narendra Modi.
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