India, Maldives ink two currency swap pacts as Muizzu banks on ‘true friend’
India and the Maldives on Monday signed two currency swap agreements totalling about Rs 6,300 crore to tide over the foreign exchange crisis in the island nation even as New Delhi looks to firm up its strategic foothold in the key Indian Ocean country by “supporting” defence platforms, enhanced surveillance and new radar systems.
Editorial: Muizzu in India
The agreements were signed as Prime Minister Narendra Modi and Maldivian President Mohamed Muizzu held their first bilateral meeting. At a media briefing where PM Modi stood alongside, Muizzu, who is on a five-day visit to India, said, “The Maldives will remain a true friend and stay committed to shared vision of peace.”
The “true friend” promise comes 11 months after Muizzu rode to power in his country on an “India out” campaign. On assuming power, he had asked Indian military personnel to leave the nation. He then opted to visit Turkiye and China, breaking away from the tradition of touring India first. India and the Maldives also released a vision document for a comprehensive economic and maritime security partnership, besides agreeing to start discussing a free trade agreement.
The twin currency swap agreements, worth $400 million and Rs 3,000 crore, will allow the Maldives to use dollars for foreign exchange needs. It will be able to use Rs 3,000 crore worth of Indian currency when sourcing something from India and repay in their own currency. Foreign Secretary Vikram Misri said the idea was to bolster the reserves. Over the past five months, the State Bank of India has rolled over $100 million worth of payments due from the Maldives.
At the strategic level, Modi said, “We will continue to support in the training and capacity building of the Maldives national defence forces (MNDF)”. The Ministry of External Affairs said India would support the Maldives with provisioning of defence platforms and assets to augment the MNDF’s capabilities. India “will advance maritime and security requirements in line with (Maldives’) national priorities”, besides helping in surveillance by supplying radars.
Asked if the military ties were back to the pre-November 2023 levels, Misri said, “There are no issues (pending) with regard to cooperation between India and the Maldives…. We will continue to work in a very close manner, as we did previously, in responding to the defence and security challenges.”
Earlier in the day, Modi handed over 700 housing units constructed in the Maldives with New Delhi’s money. Modi and Muizzu lauded the use of RuPay debit cards in the island nation and virtually opened the extension of a runway at Hanimaadhoo international airport.
PM Modi said India would focus on expediting the Greater Male Connectivity Project and also help in building the new commercial port at Thilafushi. New Delhi will take up water and sewerage projects on six additional islands, with similar projects having been already completed on 28.
In terms of development cooperation, India also rolled out infrastructure projects in the Maldives.
