Maldives' Muizzu inks MoUs with India amid shifting diplomatic tone

Economic challenges prompt Maldives to strengthen ties with India, sign Rs 30 billion currency swap agreement

The day-1 of Maldives President Mohamed Muizzu's five-day visit to India has resulted in the signing of five key Memorandums of Understanding (MoUs) between the two countries.

The MoUs signed on Monday include a Rs 30 billion bilateral currency swap agreement, which provides substantial relief to the Maldives as it addresses financial challenges.

During his visit, Muizzu, alongside Prime Minister Modi, launched the RuPay card, inaugurated the runway of Hanimaadoo International Airport, and handed over 700 social housing units built under Exim Bank’s Buyer's Credit Facilities.

#WATCH | Delhi: President Droupadi Murmu received President of Maldives Dr Mohamed Muizzuat at Rashtrapati Bhavan.

The President also hosted a banquet in honour of President Muizzu and First Lady Sajidha Mohamed. pic.twitter.com/rSYehllQPC

— ANI (@ANI) October 7, 2024

The two countries also signed an agreement aimed at enhancing bilateral cooperation to prevent and combat corruption. India agreed to bolster training and capacity-building programmes for Maldivian judicial officers. Additionally, the countries renewed an agreement on cooperation in sports and youth affairs.

 

In a joint statement following the leaders' meeting, India emphasised the importance of its relationship with the Maldives within the framework of its Neighbourhood First policy and Vision SAGAR (Security and Growth for All in the Region). India reaffirmed its ‘unwavering commitment to assist the Maldives on its development journey’.

This visit comes amid recent geopolitical strains between the two nations. Muizzu had anchored his election campaign on the ‘India Out’ rhetoric. Following his election, he made his initial foreign visits to Turkey and China, a move viewed as a ‘diplomatic snub’ to India, as most previous Maldivian Presidents have first visited New Delhi.

Muizzu also indirectly criticised New Delhi, stating that no one has ‘the license to bully’ the Maldives. He set a deadline of March 15 for India to withdraw its military personnel from the islands.

However, the Maldives’ looming economic crisis has shifted its diplomatic tone towards India. Global credit rating agency Moody's recently downgraded the Maldives’ sovereign rating, citing materially increased default risks. The nation’s foreign exchange reserves have also decreased to $440 million.

Changes have also occurred since India withdrew its personnel. The Muizzu administration suspended three deputy ministers following complaints from New Delhi over ‘disrespectful remarks’ about Prime Minister Modi.

Before his India visit, Muizzu described India as one of Malé’s most significant development partners, who would ‘always be ready’ to ease the Maldives’ ‘fiscal burden’. He also thanked India for its timely financial assistance and acknowledged its role as the ‘first responder’ in times of crisis.

Defence cooperation, a previously contentious issue, has also been revitalised. "The two countries agreed that India, as a "trusted and dependable partner," will work closely with the Maldives by "sharing expertise," augmenting capabilities, and “undertaking joint cooperative measures” as needed," the joint communique stated.

India also pledged full support for the timely completion of the Maldives National Defence Force’s (MNDF’s) ‘Ekatha’ harbour project at Uthuru Thila Falhu (UTF). Additionally, India committed to enhancing MNDF’s surveillance and monitoring capabilities by providing radar systems and other equipment.

To strengthen people-to-people connections, both countries agreed to establish a Maldives consulate in Bengaluru and an Indian consulate in Addu City.

Experts argue that in today’s complex geopolitical and geo-economic landscape, the Maldives appears to recognise that economic growth and national prosperity are best achieved through collaboration with India rather than confrontation.