Maldivian President Muizzu's Visit to India: A Strategic Move Amid Financial Crisis

Muizzu's visit to India is significant given China's growing assertiveness in the region and his pro-China stance, writes ETV Bharat's Chandrakala Choudhury.

New Delhi:In a significant diplomatic development, Maldivian President Mohamed Muizzu is set to visit New Delhi from October 6-10. This visit comes following a period of strained ties between the two countries and is seen as an opportunity to reset relations. Muizzu's visit to the country also assumes significance in the face of China's growing assertiveness in the region and the former's pro-China approach.

It is worth noting that breaking traditions, unlike his predecessors, Muizzu after assuming office travelled to Türkiye first and then to China. He visited India in June 2024 to attend the swearing-in ceremony of the Prime Minister and the Council of Ministers. This will be his first bilateral visit to India.

Not to forget, since assuming office, Muizzu has been vocal about his anti-India stance and his presidential campaign prominently featured the slogan ‘India Out’, emphasising the removal of Indian troops from the Maldives as a key focus. Dr Seshadri Chari, author and strategic and foreign policy analyst told ETV Bharat that the forthcoming visit of President Muizzu to India indicates not as much change of heart as is his need to tide over the grave financial crisis.

He said, "Only New Delhi can be trusted to bail him out without demanding a huge pond of flesh in return. His experience with China has not been particularly pleasant. Besides, the loss of business from tourism and immediate help in meeting food supplies also could be strong reasons for his turning towards India. Failure to attend to people's day-to-day needs could cost him his top job. New Delhi is aware of Muizzu's compulsions and ready to take a pragmatic view."

According to the Ministry of External Affairs, during his visit to India, President Dr Muizzu will meet President Murmu and hold discussions with Prime Minister Narendra Modi on bilateral, regional, and international issues of mutual interest. President Dr Muizzu will also visit Mumbai and Bengaluru where he will be attending business events.

The expert further opined that weaning Maldives away from Beijing is important for India. "Eventually a regime change alone can set the course correction between our bilateral relations", added Dr Seshadri Chari.

Dr Muizzu's visit to New Delhi after assuming office last year also comes with the Central Bank seeking a $400 million currency swap arrangement under the South Asian Association for Regional Cooperation (SAARC) framework. This swap deal is an Indian bailout to help Maldives deal with the debt crisis.

"As per the currency swap agreement with India, Maldives can access $400 million from the Reserve Bank of India (RBI). The agreement is meant to help the Maldives with its financial challenges, including a potential Sukuk default. Sukuk is a “Sharia-compliant” Islamic variety of conventional bonds, issued in the form of a financial certificate that represents a portion of ownership in a portfolio of eligible existing or future assets", Professor Seshadri Chari said.

The Maldives can also seek long-term loans under an $800 million credit line. India has already provided a 50 million dollar emergency loan to the Maldives to meet the ongoing financial crisis.

"A currency swap is a financial agreement between two parties to exchange principal amounts and interest payments in different currencies over a specific period. The Maldives and India previously had a currency swap in December 2020, when the Maldives received $250 million", Dr Chari told ETV Bharat.

Maldives is also in discussion with India about paying for imports in Maldivian Rufiyaa. The Maldives imports $780 million in goods from India and $720 million from China each year.

Maldives is India's key maritime neighbour in the Indian Ocean Region (IOR) and holds a special place in the Prime Minister's vision of ‘SAGAR’ (Security and Growth for All in the Region) and India’s ‘Neighbourhood First Policy’. "The visit of President Dr Muizzu to India after the recent visit of the External Affairs Minister to the Maldives is testimony to the importance that India attaches to its relations with the Maldives and is expected to lend further momentum to cooperation and robust people-to-people ties between the two countries", said MEA in a statement.

In an exclusive conversation with ETV Bharat, Dr Harsh Pant, Vice-President of the Observer Research Foundation, shared his perspective on the Maldivian President's visit to India.

He said, "Certainly, there has been a serious recalibration in Maldivian approach to India. Dr Muizzu has recognised that India remains a very important strategic partner and there is no getting away from that reality".

"Whatever, President Muzziu might have said during his election campaign, once he started governing he must have realised the challenges of governance and that is what has brought about this recalibration," added Pant.

He pointed out that, while there was a lot of upheaval in the social media following hate comments by Maldivian MPs, the Indian government managed to keep its cool and nurture the relationship keeping in mind the long-term engagement and "I think that is why we are seeing this significant shift both in terms of the recognition by President Muizzu and his government of the challenges that Maldives face and India's role in managing those challenges as well as Indian diplomacy, which very effectively tackled some of the initial turbulence in this relationship", Dr Pant said.

"The China factor continues to be relevant, but the realisation, the recognition that India will remain the first port of call on most issues given the geography of Maldives and its historical ties with India, cannot be really replicated by China. In that sense, the India-Maldives relationship has now come back to an equilibrium. The acceptance of the logic of India's centrality is something that we are witnessing in this relationship," added Pant.

The relationship between India and the Maldives has been strained recently, particularly following the election of President Mohamed Muizzu in 2023. Muizzu is seen as pro-China and has taken steps to distance the Maldives from India's influence, which has raised concerns in New Delhi.

Muizzu's administration has indicated a desire to strengthen ties with China, potentially reversing the previous government's closer alignment with India. The Maldives has historically relied on India for security assistance, but Muizzu's government has expressed scepticism about Indian military presence in the country.