Maldives President Mohamed Muizzu is known for his “India Out” stance during his campaign and a lean towards China. Amid Tourism suffering a downfall in Maldives, Muizzu is on his first official bilateral visit to India from October 6 to October 10, 2024.
Strained Relations Between Maldives and India
India and Maldives have been experiencing tense relationships since Muizzu was elected as president in November 2023. His campaign to reduce the Maldives’ dependency on India, including withdrawal of around 85 Indian military personnel stationed in the Maldives to operate aircraft provided by India, seriously strained the relationships.
However, in recent months, both Indian and Maldivian officials have expressed a willingness to strengthen cooperation. President Muizzu’s trip is anticipated to revitalize economic and diplomatic cooperation between the two nations.
Key Diplomatic Talks During His Visit
An invitation from India’s President, Droupadi Murmu, was sent to the Maldives’ President, Muizzu, as the Maldives remains a critical partner in the Indian Ocean region.
During his visit, President Muizzu will meet with Indian President Murmu and Prime Minister Narendra Modi. Talks are expected to cover a wide range of topics, from economic cooperation to regional security issues. Muizzu’s agenda also includes interactions with the Maldivian diaspora in Bengaluru and business events in Mumbai, showcasing the importance of both people-to-people connections and economic partnerships.
Maldives Struggles Economically
During his visit, one of Muizzu’s key priorities is addressing the Maldives’ economic crisis.
Debt Crisis
The island nation’s foreign reserves are critically low, and its debt obligations to international creditors are rising. With a significant debt to both China and India, the Maldives has sought financial assistance from India, including a $400 million currency swap to stabilize its foreign exchange reserves. As of September, the Maldives had only $440 million in reserves, enough to cover about six weeks of imports.
Maldives’ public debt is approximately $8 billion, with concerns about default on international loans mounting. To alleviate these pressures, Muizzu is likely to seek grants, debt restructuring, and financial aid from India during his visit.
Decline In Tourism
The Maldives, heavily dependent on tourism, has witnessed a decline in Indian tourist arrivals, largely due to recent diplomatic tensions. Tourism from India, once the largest contributor, dropped significantly, resulting in an estimated loss of $150 million in revenue. Muizzu has recognized the economic impact of strained relations, leading him to adopt a more diplomatic approach towards India in recent months.
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