India to Provide $400 Million Credit Swap Facility to Maldives
Visits
6 min read
President of Maldives, Dr Mohamed Muizzu, was on his first official bilateral visit to India from 6-10 October 2024. He had earlier visited India in June 2024 to attend the swearing-in ceremony of Prime Minister Narendra Modi. Dr Muizzu first visited New Delhi on 7 October 2024, where he met President Droupadi Murmu and Prime Minister Narendra Modi. President Muizzu will visit Mumbai and then Bengaluru to attend business events.
Dr. Mohamed Muizzu's visit to India follows the visit of External Affairs Minister Dr S. Jaishankar to the Maldives from 9 to 11 August 2024.
India has agreed to help Maldives manage its external debt by extending a $ 400 million credit swap facility.
A Vision for Comprehensive Economic and Maritime Security Partnership
After Prime Minister Narendra Modi and Dr Mohamed Muizzu's meeting, the leaders issued a joint statement titled “India Maldives: A Vision for Comprehensive Economic and Maritime Security Partnership.”
Prime Minister Modi reiterated India’s commitment to helping the Maldives develop under its ‘Neighbourhood First’ Policy and Vision SAGAR. President Dr Mohamed Muizzu thanked India for helping prevent the Maldives from defaulting on debt repayment.
Both the leaders jointly launched /inaugurated a number of projects in Maldives financed by India.
Projects launched/inaugurated by both the leaders
- Both leaders launched RuPay Cards developed by the National Payment Corporation of India (NPCI) in Maldives.
- Inaugurated the new runway of the Hanimaadhoo International Airport in Maldives.
- Over 700 social housing units were built in the Maldives under the Export-Import Bank of India (EXIM) Bank’s Buyers’ Credit Facilities.
Renewal/Signing of 5 MoUs
- The Reserve Bank of India will extend a $400 million currency swap facility to the Maldives Monetary Authority(Central Bank of Maldives).
- Rashtriya Raksha University India and the National College of Policing and Law Enforcement of Maldives
- Indian Central Bureau of Investigation and the Anti-Corruption Commission of Maldives to cooperate in preventing and combating corruption
- Renewal of MoU between the National Judicial Academy of India and the Judicial Service Commission) of the Maldives on Training and Capacity Building Programs for Maldivian judicial officers
- Sports and Youth Affairs.
Other Highlights of the Visit
- India will help the Maldives develop a modern commercial port at Thilafushi island to de-congest the Malé port.
- India will establish a new consulate in Addu City, and the Maldives will open its consulate in Bengaluru.
India’s Help to Maldives in Avoiding Debt Default
India recently provided financial assistance to help Maldives avoid default on its external debt and Sukuk debt. Sukuk debt is a bond issued per Islamic Sharia law and does not carry interest rates.
- In May 2024, the State Bank of India subscribed to the Maldivian government’s $50 million Treasury Bills (short-term debt instrument) to provide liquidity to the Maldivian government.
- In September 2024, the Indian government again bought $50 million Maldivian Treasury Bills at the Maldivian government's request.
- During Dr Mohamed Muizzu's visit to India, the Indian government extended a $400 million currency swap facility to the Maldives so that it could repay its external debts.
- Maldives' external debt is estimated to be 110% of its gross domestic product.
- China and India are the top two lenders to the Maldives.
About Maldives
It is an archipelago situated in the Indian Ocean.
Capital: Male
Currency: Rufiyaa
