The Maldives government must pay $50 million to India by the end of the day, marking the third instalment of a $150 million Treasury bill issued in 2019 by the State Bank of India (SBI). The first $50 million was paid in January, and while the second payment, due in May, was rolled over, today’s instalment remains uncertain.
Under the previous administration of President Ibrahim Mohamed Solih, the Indian government had covered the interest on the Treasury bill and signalled intentions to convert the debt into a grant. However, relations between India and the Maldives have strained since the election of President Dr Mohamed Muizzu, and no such conversion has taken place.
Experts suggest that the Maldives could still pay the $50 million due today, but only as a last resort, given the country’s ongoing economic struggles and the shortage of US dollars in the reserves.
Reports from local media suggest that India has linked the payment to broader geopolitical concerns. India is reportedly seeking to pressure the Maldives to cancel a reclamation project at Uthuru Thilafalhu (UTF), involving China Harbour, which aims to develop 200 hectares of land into an agricultural and industrial hub. India is said to be concerned that the project, located just 14.6 kilometres from Malé, will increase China’s influence in the Maldives.
Sources familiar with the matter suggest that India may agree to roll over the payment if the Maldives government withdraws from the UTF project, but official confirmation on this matter has not yet been made.
The Maldives government has not publicly commented on the status of today’s payment or the UTF negotiations.
The Maldives government must pay $50 million to India by the end of the day, marking the third instalment of a $150 million Treasury bill issued in 2019 by the State Bank of India (SBI). The first $50 million was paid in January, and while the second payment, due in May, was rolled over, today’s instalment remains uncertain.
Under the previous administration of President Ibrahim Mohamed Solih, the Indian government had covered the interest on the Treasury bill and signalled intentions to convert the debt into a grant. However, relations between India and the Maldives have strained since the election of President Dr Mohamed Muizzu, and no such conversion has taken place.
Experts suggest that the Maldives could still pay the $50 million due today, but only as a last resort, given the country’s ongoing economic struggles and the shortage of US dollars in the reserves.
Reports from local media suggest that India has linked the payment to broader geopolitical concerns. India is reportedly seeking to pressure the Maldives to cancel a reclamation project at Uthuru Thilafalhu (UTF), involving China Harbour, which aims to develop 200 hectares of land into an agricultural and industrial hub. India is said to be concerned that the project, located just 14.6 kilometres from Malé, will increase China’s influence in the Maldives.
Sources familiar with the matter suggest that India may agree to roll over the payment if the Maldives government withdraws from the UTF project, but official confirmation on this matter has not yet been made.
The Maldives government has not publicly commented on the status of today’s payment or the UTF negotiations.