India-Maldives FTA: President Mohamed Muizzu hopes to sign pact with ‘closest ally,’ says thanks for easing debt

India Maldives: Maldives President Mohamed Muizzu, on Monday, thanked India for financially supporting the island nation in easing its debt repayment. President Muizzu also expressed his hopefulness that India and Male would forge stronger ties and sign a free trade agreement.

The Maldives administration is in the process of negotiating a Free Trade Agreement (FTA) with the United Kingdom and aspires to reach similar terms with India, said President Muizzu. He even stated that India will continue to remain the Maldives' "closest ally" and mentioned there should not be any doubts about it.

Muizzu's affirmation came during his address at the official Independence Day celebrations in Maldives on Friday. He commended Maldives' foreign policy administration, marking eight months of 'diplomatic success,'  ANI reported quoting the Maldives President's Office.

President Muizzu expressed gratitude to India and China for their support in easing the Maldives' debt repayment, thereby enabling the country to ensure economic sovereignty. He further added that the Maldives government is in talks for negotiating currency swap agreements with India's capital New Delhi, and Beijing, in China. These agreements would help alleviate the local shortages of US dollars, said Muizzu.

While India-Maldives relations have been sour earlier, the Mohamed Muizzu-led government took a reconciliatory stance.

In June 2024, President Muizzu also attended the oath-taking ceremony of PM Modi, after the latter assumed office for a consecutive third term, following his victory in the Lok Sabha elections.

According to Maldives-based The Edition, last year's data shows that Maldives owes India 6.2 billion Maldivian Rufiyaa, which is an estimated ₹338 crore.

Earlier this year, the International Monetary Fund (IMF) had warned Maldives that it faces a high risk of debt distress without significant policy changes.

India-Maldives: What happened before

After coming to power, President Mohamed Muizzu adopted an 'anti-India' rhetoric as a continuation of the electoral campaign rhetoric of 'India Out'. The removal of Indian troops from the country was the main election campaign of Muizzu's party. He also departed from the custom of making the first official visit to India and went to China instead.

In December 2023, the Maldives had also said that it would not renew the Hydrographic Survey agreement made with India.

A row between New Delhi and Male erupted after three Maldivian deputy ministers made derogatory comments against Prime Minister Narendra Modi, over his pictures from the visit to Lakshadweep.

(with agency inputs)