At the request of the Government of Maldives, the State Bank of India (SBI) has rolled over a $50 million Treasury bill (T-bill) issued by the Ministry of Finance for another year, following the maturity of the previous subscription on 19 September 2024. This marks the second instance this year where SBI has extended a similar financial lifeline, with a previous $50 million T-bill rolled over in May 2024 under the same mechanism.
Both rollovers were made as part of emergency financial assistance, upon the Maldives government’s special request. The Indian High Commission in the Maldives emphasised India’s continued support to its key maritime neighbour, highlighting the broader context of the ‘Neighbourhood First’ policy and Vision SAGAR (Security and Growth for All in the Region).
However, the latest instalment comes against a backdrop of growing tensions between India and the Maldives following the election of President Dr Mohamed Muizzu. Diplomatic sources suggest that India’s support may now be linked to broader geopolitical concerns, including pressure on the Maldives to cancel a controversial land reclamation project at Uthuru Thilafalhu (UTF), where Chinese interests are involved.
While the Maldives government has not publicly commented on the status of the payment or the UTF project, some experts note that this rollover could be India’s way of leveraging influence in the ongoing negotiations.
India has previously assisted the Maldives with favourable terms, including interest waivers, and the Indian government had earlier hinted at potentially converting the debt into a grant during the administration of former President Ibrahim Mohamed Solih. However, with economic uncertainty and geopolitical factors now at play, no such conversion has occurred.
India has reaffirmed its commitment to the Maldives, extending additional support by granting a special quota for the export of essential commodities earlier this year. However, the future of bilateral relations could hinge on how both nations navigate these pressing issues.
