In a significant move reflecting deepening diplomatic relations, India has allocated $69 million (1 billion Maldivian rufiyaa) in aid to the Maldives for the 2025-2026 fiscal year. This marks an increase from the $54 million (833 million rufiyaa) designated in the previous year’s budget.
The Maldives is set to receive the second-largest portion of India’s foreign aid budget, accounting for approximately 25% of the $250 million (3.9 billion rufiyaa) earmarked for various countries. Nepal tops the list with an allocation of $80 million (1.2 billion rufiyaa), while Mauritius follows with $58 million (894 million rufiyaa).
Indian Budget Allocation for the neighborhood: Maldives sees an allocation increase of Rs 600 cr (FY2025-26) (vs Rs 470 cr Revised Budget FY2024-2025) https://t.co/dfUT7ZFI5j
— Sidhant Sibal (@sidhant) February 1, 2025
This enhanced support comes as the Maldives navigates economic challenges, including substantial debt obligations. In recent months, India has extended emergency financial assistance to the archipelago nation, including a $50 million treasury bill subscription to help avert a potential debt default.
Diplomatic relations between the two nations have been on an upswing following President Dr. Mohamed Muizzu’s visit to India. Subsequent discussions between Maldivian Foreign Minister Dr. Abdulla Khaleel and Indian officials have further solidified the partnership. These engagements underscore a mutual commitment to regional stability and economic collaboration.
India’s aid strategy encompasses support to countries such as Afghanistan, Bhutan, Bangladesh, Myanmar, Sri Lanka, Mongolia, and Seychelles. In the previous fiscal year, India allocated $293 million (4.5 billion rufiyaa) for foreign aid, highlighting its role in regional development.
The increased aid to the Maldives not only reflects India’s recognition of the Maldives’ strategic importance in the Indian Ocean but also signifies a strengthening bond between the two nations, fostering economic growth and regional cooperation.
