Prime Minister Narendra Modi with President of Maldives Mohamed Muizzu during a meeting at Hyderabad House, in New Delhi, Monday, Oct. 7, 2024.
PTI
New Delhi: President Mohamed Muizzu on Monday agreed to let New Delhi deploy “defence platforms and assets” in the Maldives – signalling a turnaround in his approach just a few months after his government in Malé had made India withdraw all its military personnel stationed in the Indian Ocean archipelago for humanitarian operations.
New Delhi will also support Malé in enhancing the surveillance and monitoring capability of the Maldivian National Defence Force by providing “radar systems and other equipment” to the island nation.
As Muizzu met Prime Minister Narendra Modi in New Delhi, India agreed to do its bit to help the Maldives sail through the economic crisis and an imminent debt default.
The Reserve Bank of India entered into a currency swap agreement with the Maldives Monetary Authority under the SAARC Currency Swap Framework 2024-27. The agreement, which will remain valid till June 18, 2027, will make the MMA eligible for financing support from the RBI amounting to $400 million under the USD/Euro Swap Window and Rs 3,000 crore under the INR Swap Window.
It will provide the tiny nation a backstop line of funding for short-term foreign exchange liquidity requirements or short-term balance of payments stress till longer-term arrangements are made.
“India has consistently acted as the first responder for the Maldives. Be it essential commodities for the people of the Maldives, providing drinking water during natural disasters, and delivering vaccines during the COVID pandemic, India has consistently upheld its responsibilities as a neighbour,” Modi said after meeting Muizzu. The two leaders elevated the bilateral relations to a Comprehensive Economic and Maritime Security Partnership.
They agreed that India would help augment the capabilities of the Maldives to protect its vast exclusive economic zone from traditional and non-traditional challenges to maritime security.
Modi said that he and Muizzu had engaged in comprehensive discussions on various aspects of defence and security cooperation. “We will continue our cooperation in training and capacity building of the Maldives National Defence Forces. Together, we will strive for stability and prosperity in the Indian Ocean region. We will enhance our cooperation in hydrography and disaster response,” the prime minister said, sending a message to China, which sought to pull the Maldives into its orbit of geopolitical influence, particularly after Muizzu’s ascent to power in the Indian Ocean nation.
New Delhi will support Malé with the “provisioning of defence platforms and assets” to augment the capabilities of the Maldivian National Defence Force as well as that of the Government of Maldives in advancing its maritime and security requirements in line with its national priorities, according to a joint statement issued after the Modi-Muizzu meeting.
New Delhi had some military personnel deployed in the Maldives to operate and fly the Dornier aircraft and the two Advanced Light Helicopters India had gifted to the neighbouring archipelago for emergency evacuation of people from the remote islands.
Muizzu, who had in the past taken a lead role in the ‘India-Out’ campaign in the Maldives, won the presidential elections in September 2023. He had promised during his poll campaign that he would make India withdraw all its military personnel from the Maldives as their presence undermined the sovereignty of the island nation. He kept his promise and made India withdraw all its military personnel from the Maldives by May 10 this year –apparently at the behest of China.
But, with an economic crisis looming over his tiny nation, Muizzu has been over the past few months warming up to New Delhi. The foreign exchange reserve of the Maldives has plummeted to $440m, just enough for one-and-a-half months of imports. Beijing’s lukewarm response to its call for assistance prompted Malé to turn to New Delhi.
"We look forward to concluding the Free Trade Agreement with India, which will enable us to harness the full economic potential between our countries and to increase Indian investments in both our tourism and development sectors,” Muizzu, currently on his first state visit to New Delhi, said after his meeting with Modi.
He thanked New Delhi for its timely emergency financial assistance to Malé, particularly by getting the Treasury Bills worth $100 million, issued by the government of the Maldives and subscribed by the State Bank of India, rolled over for a further period of one year.
The two leaders launched India’s Rupay card in the Maldives. They remotely inaugurated a new runway built with support from New Delhi at the Hanimadhoo International Airport in Malé. Over 700 social housing units constructed with India’s assistance in the Maldives were also handed over to the beneficiaries on Monday.
Modi and Muizzu agreed to expedite several infrastructure projects India is funding in the Maldives, The joint statement noted that the 'Ekatha' Harbour project India was building at Uthuru Thila Falhu (UTF) in the Maldives would significantly contribute towards enhancing MNDF's operational capabilities. A parliamentary panel in the Indian Ocean archipelago had earlier this year launched an inquiry into a 2021 bilateral agreement that allowed India to “develop, support and maintain” a harbour at Uthuru Thila Falhu naval base in the island nation.