The Maldives government on Friday denied media reports that claimed India was planning to offer it $1 billion (Rs 6,980 crore) in exchange for permanent deployment of Indian troops in the island nation.

Maldives Foreign Minister Abdulla Shahid was reacting to a report in the Nikkei Asian Review that quoted unidentified Indian government officials as saying that Delhi was thinking about giving up to $1 billion in loans to help Maldives pay its debts to China. The loans conditioned on Male distancing itself from China as well as on allowing India to deploy its security personnel to the island nation.

“The Government of Maldives categorically refutes media reports alleging that it is planning to allow the establishment of an Indian military base in the Maldives, in exchange for financial assistance or other material benefits,” the Ministry of Foreign Affairs said in a statement. “The allegations are baseless, and aimed at discrediting the efforts of the government as it starts to rebuild good relations with its neighbours and the rest of the international community.”

Shahid said his government will always act in the national interest and “will not undertake any international engagement that will compromise the sovereignty and independence of the country”.

Shahid had met External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman during an official visit to India last week. According to a statement released by the Ministry of External Affairs, Shahid had reiterated his government’s “India First” policy and said it looked forward to working closely with Delhi on all matters. He had also promised that Maldives would remain sensitive towards India’s security and strategic concerns.

In turn, Swaraj had reiterated India’s commitment to transparency, mutual understanding and sensitivity in its ties with the Maldives.

Shahid’s visit to India came days after Prime Minister Narendra Modi attended the swearing-in ceremony of Maldivian President Ibrahim Mohamed Solih in Male on November 17. Both leaders had expressed confidence in the “renewal of the close bonds of cooperation and friendship” between the two countries and agreed on the importance of maintaining peace and security in the Indian Ocean.