India Rolls Over $50 Million Treasury Bill to Support Debt-Ridden Maldives

India has extended critical financial assistance to the Maldives by rolling over a $50 million treasury bill for another year, reflecting New Delhi’s continued support for the debt-ridden archipelago nation. The decision comes amid strained ties and economic instability in the Maldives, and was executed through the State Bank of India (SBI) at the request of the Maldivian government.

Why in News?

India announced on May 12, 2025, that it has renewed its $50 million treasury bill subscription with the Maldives for one more year. The move underscores India’s commitment to regional stability and economic cooperation with its neighbors, despite recent diplomatic frictions.

Key Details of the Financial Support

• Amount: $50 million
• Instrument: Treasury bill issued by Maldives’ Finance Ministry
• Facilitator: State Bank of India (SBI)
• Term: Rolled over for 1 more year
• Purpose: Provide financial breathing space to Maldives amid debt crisis

Background Context

• The Maldives has been struggling with rising public debt, exacerbated by external borrowings and pandemic-related setbacks.
• India had earlier subscribed to this treasury bill in 2023, and this roll-over reflects India’s continued economic backing.

Significance of India-Maldives Economic Cooperation:

• Strategic Importance: Maldives is India’s maritime neighbor in the Indian Ocean and part of its ‘Neighbourhood First’ policy.
• Stabilizing Influence: The aid helps maintain economic stability and reduce dependence on non-democratic nations.
• Diplomatic Outreach: Comes after a tense phase in bilateral relations, showing India’s willingness to keep dialogue open.
• Soft Power Projection: India’s financial diplomacy reinforces its image as a reliable regional partner.

About Treasury Bills

• Treasury bills are short-term debt instruments issued by a government to meet immediate funding needs.
• They are considered low-risk and are often used in bilateral support programs.