India is considering providing up to USD1 billion in loans to the Maldives to help it pay its debt to China, India media has reported.
India is in talks with the Maldives, offering low-interest loans over several installments in exchange for stronger security ties, including the permanent deployment of Indian military personnel in the island nation, according to Indian government sources quoted by the country's media.
The countries are expected to iron out the details before new Maldives president Ibrahim Mohamed Solih, who took office on earlier this month visits India in December.
The island nation has amassed billions in debt to China to fund mega development projects initiated by former Maldives president Abdulla Yameen Abdul Gayoom.
Beijing has provided grant and loans to fund several major infrastructure projects including a landmark bridge connecting the capital Male to the airport island Hulhule.
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.
Shahid "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."
Shahid’s visit comes just over a week after Prime Minister Narendra Modi attended Solih’s swearing-in ceremony.
The visit is Modi's first to the Maldives after years of tense relations between the two countries because of Solih's predecessor's embrace of China during his tenure.