India has decided to grant concessions on the repayment of Maldivian debt.

Following talks with President Dr Mohamed Muizzu yesterday, Prime Minister Narendra Modi, during his two-day visit to the Maldives, announced a relaxation of the terms of the current line of credit provided through the Export-Import Bank of India.

According to Foreign Secretary Vikram Misri, the adjustment will result in a 40 per cent reduction in the Maldives’ annual debt repayments. The country will now pay USD 29 million per year instead of USD 51 million.

Misri noted that India had previously extended a line of credit worth USD 800 million, although only part of the amount had been utilised, with nearly half remaining unused due to various factors. He added that repayments on the amount drawn were now due under the original agreement. Taking into account the Maldives’ current financial situation, India has opted to revise the terms to provide relief.

The Foreign Secretary explained that the amendment to the existing arrangement is intended to close the current line of credit and reduce the outstanding amount. In addition, a new line of credit agreement has been introduced to finance a significant number of development projects, with payments to be calculated in Indian rupees to offer greater convenience for the Maldives.

On Friday, the two countries signed a new line of credit agreement worth USD 565 million. Officials confirmed that these funds will be used to implement key Government policies, a point reiterated by President Dr Muizzu in an official statement.