India is prepared to offer USD 1 billion in loans to Maldives, according to media reports released on Wednesday. However, the offer stipulates the Maldivian government temporarily assign Indian military officers to be based in Maldives, further stating that the nation has been alarmed by the possibility of China building naval bases on the islands.
Responding to comments made by certain India authorities, Japanese media outlet 'Nikkei Asian Review' wrote that the “countries are expected to iron out the details before President Solih visits India” on December 17. If so, the loan would help Maldives repay its debt to China and for development projects planned for the next five years by the newly-elected administration.
Negotiations appeared to be made following the recent visit made by the official delegation from Maldives consisting of Minister of Foreign Affairs Abdulla Shahid, Minister of Economic Development Fayyaz Ismail and Minister of Finance and Treasury Ibrahim Amir. During the visit, discussions were held amongst some of the top officials from the Indian government.
The main issues raised were regarding how India could assist the Maldivian government to overcome their mounting debt and ways to support economic development projects within Maldives.
In addition, media reports suggested that India has offered low-interest rates loans over several instalments.
During President Abdulla Yameen Abdul Gayoom's administration, Maldives acquired loans amounting to USD 1.5 billion from China, as part of Beijing’s Belt and Road Infrastructure Initiative, for building various infrastructure, including bridges and housing facilities .
As such, post the recent election of President Solih, India has expressed renewed hopes to repair their close relationship with Maldives whilst also seeking to reduce the nation's dependency on China.
Hence, it has been confirmed by the foreign and defence ministries, that the policies governing the new administration will be shaped with due consideration given to the relationships between Maldives and the two Asian powers.
According to local media Mihaaru, India is prepared to open a credit line of USD 1 billion to Maldives. However, no further details on the loan, or regarding the requirements that would allow its succession, have been released thus far.