India is reportedly considering to lend $1 in low interest loans to Maldives, to help them repay their debts to China. This is being considered a major diplomatic move as India looks to keep the Island nation out of Chinese influence.
Against the financial aid, India seeks to permanently deploy Indian military personnel at Maldives. The Ministry of External Affairs (MEA) said in a statement that India supported the Maldives in ‘ensuring fiscal and budgetary stability’.
Maldives is under about $3 Billion Dept from China, which they are are in no condition to repay from their own economy. Using this opportunity, China wants to expand its foothold in Indian ocean by seeking permissions to build naval basses in Maldives, against the loans. China had earlier used a similar strategy in Sri Lanka, where they acquired the entire Hambantota Port and surrounding areas for a period of 99 years, after Lankan government struggled to repay their debts.
India, however is determined to resist Chinese influence over the Indian ocean. If everything falls in place then both the Countries will seal the deal during Maldivian President Ibrahim Mohamed Solih’s visit to India in December. It is also being reported that Solih favors India over China and wants to establish close ties.
Negotiations appear to be going well. Maldivian Foreign Minister Abdulla Shahid and Indian External Affairs Minister Sushma Swaraj agreed to cooperate on economic and security issues at a Monday meeting in New Delhi.
Abdulla “reiterated that the government of Maldives will be sensitive towards India’s security and strategic concerns,” the Indian Foreign Ministry said in a statement, adding that India supports the Maldives “in ensuring fiscal and budgetary stability.”