Mohammed Muizzu to seek bailout from India amid Maldives economic crisis: Report

Maldivian President Mohammed Muizzu landed in New Delhi on Sunday seeking financial assistance as the island nation faces an economic crisis, with dwindling foreign reserves and rising risk of debt default.

In Short

• Maldives' reserves fall to $440 million, risking debt default
• Muizzu acknowledges India-Maldives ties despite past tensions
• Mohammed Muizzu arrives in India, to hold talks with PM Modi

Maldivian President Mohammed Muizzu has expressed confidence that India will step up to assist the island nation as it grapples with a worsening economic crisis. Muizzu, who arrived in New Delhi on a five-day visit, is expected to request a financial bailout amounting to hundreds of millions of dollars, a BBC report stated.

With foreign exchange reserves dwindling to just $440 million, the Maldives finds itself perilously close to a debt default —enough reserves to cover only six weeks of crucial imports.

"India is fully cognisant of our fiscal situation, and as one of our biggest development partners, will always be ready to ease our burden, find better alternatives and solutions to the challenges we face," BBC quoted Muizzu as saying in an email interview.

Further in the interview, Muizzu acknowledged the deep-rooted ties between the two nations, though he refrained from addressing his earlier anti-India stance, a key issue that defined his political campaign.

"We are confident that any differences can be addressed through open dialogue and mutual understanding," he said.

Last month, Moody's, the global credit rating agency, downgraded the Maldives' credit rating, saying "default risks have risen materially". India has already offered a substantial financial package of $1.4 billion to the Maldives to support its infrastructure and development projects.

INDIA-MALDIVES TIES

Since Muizzu, known for his pro-China stance, assumed office as the President of the Maldives in November last year, diplomatic relations between India and the Maldives have faced significant tension. In fact, Muizzu rose to power on the back of his 'India Out' campaign, where he demanded the withdrawal of Indian troops and support staff from the Maldives.

Just hours after taking the oath, Muizzu called for the immediate withdrawal of Indian military personnel from the island nation and subsequently New Delhi replaced its Army with civilians.

Soon after, a diplomatic dispute erupted after some ministers in President Muizzu's cabinet used derogatory language against Prime Minister Narendra Modi.

The remarks came after PM Modi shared images on his social media promoting the Lakshadweep islands. Though the ministers involved were swiftly dismissed from their positions by Muizzu, the incident led to a notable decline in tourist arrivals from India, impacting the Maldives' tourism sector.

MOHAMMED MUIZZU INDIA VISIT

Muizzu has landed in New Delhi to pay a five-day visit to India beginning Monday with the aim to reset ties between the two nations and seen financial assitance.

The Ministry of External Affairs (MEA), announcing Muizzu's trip, had said it is expected to lend further momentum to cooperation and robust people to people ties between the two countries.

During his visit, Muizzu will hold discussions with PM Modi on bilateral, regional and international issues of mutual interest, the ministry said. Besides Delhi, he will also visit Mumbai and Bengaluru, where he will be attending business events.