Upcoming debt obligation to India: Nasheed calls on govt. to enter talks with parties

Former president Mohamed Nasheed has called on the government to engage with all political parties in discussions concerning the Maldives’ substantial debt obligations to India.

In a post on the social media platform X, Nasheed noted that a USD 400 million debt owed to India is due for repayment in April. He pointed out that while the repayment deadline has already been extended twice, reports in Indian media indicate that the country’s financial regulations may prevent a third extension.

Speaking on Maldives’ current financial state, Nasheed, referring to the fact that the government recently settled a USD 525 million Sukuk bond payment earlier this month, raised concerns regarding whether the nation’s foreign currency reserves had sufficient funds. He cautioned that any default on debt obligations would have severe consequences for the financial system, the government, and the private sector.

Nasheed further stated that a central aim of the ‘Bodu Badhalu’ reforms proposed by the MDP is to enable extensive dialogue on debt management strategies.

"If the negotiations with the Indian government are agreed upon by all political parties, the likelihood of a successful outcome increases significantly. We urge the government to come to the discussion table," Nasheed remarked.

These remarks follow media reports from India indicating that President Dr. Mohamed Muizzu’s administration has requested an additional extension of the USD 400 million currency swap facility provided by India.

The facility, which was initially extended in October 2024, has already been extended twice.

Despite legal and administrative constraints under the SAARC currency swap framework regarding further extensions, reports suggest that the Indian government is currently exploring possible solutions within regulatory limits.