India and the Maldives resumed defense talks for the first time since New Delhi withdrew its uniformed military personnel from the island nation earlier this year.
This significant dialogue comes amidst mounting concerns over the Maldives’ economic situation, including a potential default on its $500 million sukuk debt, and after a period of strained ties following the election of President Mohamed Muizzu, who campaigned on an “India Out” platform.
The discussions were led by India’s Defence Secretary Giridhar Aramane and Maldives’ Chief of Defence Force General Ibrahim Hilmy. Both sides focused on ongoing defense cooperation projects and future military exercises.
An official statement from India’s Defence Ministry described the talks as “productive,” emphasizing that they will enhance mutual interests and contribute to stability in the Indian Ocean region.
The re-engagement in defense talks is seen as a significant step after President Muizzu’s request late last year for India to withdraw its military personnel.
By early 2024, India had completed the phased withdrawal of 80 military personnel, replacing them with technical staff to operate helicopters and aircraft still stationed in the Maldives.
The bilateral relationship, which had cooled after Muizzu’s rise to power, is now showing signs of renewal. External Affairs Minister S. Jaishankar’s visit to Male in August marked the first high-level contact since Muizzu’s election, and this defense dialogue is another step towards mending the strained ties.
Meanwhile, the Maldives is grappling with economic challenges as sukuk bonds issued by the nation are trading at record lows. Investors are increasingly worried about the island nation’s ability to service its debt, with the next coupon payment on the $500 million sukuk due on October 8. “The default risk in the Maldives sukuks has increased as the country has large external payments coming due and not enough FX reserves to service them,” said Purvi Harlalka, a senior emerging-market sovereign debt strategist at M&G.
The ongoing talks between India and the Maldives aim to rebuild defense ties that have been historically robust. India has provided significant military aid to the Maldives in the past, including gifting a Dornier aircraft and a patrol vessel. The two nations have also cooperated on larger infrastructure projects, like the $500 million Greater Male Connectivity Project financed by India.
