India Yet to Decide on Deferring Maldives’ $400 Million Loan Repayment

India has not yet reached a final decision on a request by the Maldives to defer repayment of a $400 million loan, according to a report by Hindustan Times.

The Maldivian government has asked India to extend the repayment period by an additional two to three years. However, the Indian government has not finalized its position on the matter.

The report highlights that the Maldives is currently facing significant financial strain, with foreign reserves declining sharply. This situation reportedly worsened after the government of Mohamed Muizzu used much of its reserves to repay a $100 million Eurobond and a $400 million Islamic sukuk bond.

India is also said to be weighing several considerations before making a decision. Previously, India’s Union Cabinet had approved only short-term deferments, granting extensions of six months on two occasions. Following those extensions, the Maldives requested a longer-term deferral of between two and three years.

According to the report, discussions are still ongoing within the Indian government, and a final decision on the extended deferment has yet to be made.