NEW DELHI: India and the Maldives on Friday unveiled a significant reset in bilateral relations, with Prime Minister Narendra Modi announcing a ₹4,850 crore line of credit and a new framework for expanding cooperation in trade, defence, infrastructure, and digital connectivity.
Prime Minister Modi’s visit, his first to the Maldives in his third term marks a sharp turnaround in bilateral ties, which had faced strain early in President Mohamed Muizzu’s tenure.
Reflecting the renewed warmth, Muizzu and senior Maldivian ministers welcomed Modi at Velana International Airport.
After delegation-level talks, Modi said, “India is proud to be the most trusted friend of the Maldives. For us, it is always friendship first.”
He added that the Maldives holds a central place in India’s Neighbourhood First policy and the MAHASAGAR vision for regional maritime cooperation.
“India will always stand by the Maldives in strengthening its defence capabilities,” Prime Minister Modi said, adding that deepening security ties reflect the trust between the two nations.
“Our defence and security cooperation is a testament to mutual trust. The roots of our relationship are older than history and as deep as the sea… our friendship will remain bright and clear.”
Foreign Secretary Vikram Misri described the visit as “a demonstration of trust and strategic convergence.” On India's concerns about foreign military presence in the region, Misri said: “Security is a mutual concern. Both sides reaffirmed that peace and stability in the Indian Ocean are shared responsibilities.”
The two nations agreed to move swiftly on finalising a bilateral investment treaty and launched negotiations for a Free Trade Agreement (FTA). “We hope to conclude the India-Maldives FTA quickly,” Misri said. The line of credit is denominated in Indian rupees, the first such rupee-denominated LoC extended by India to the Maldives.
Prime Minister Modi’s two-day visit also aims to reinvigorate India’s development partnership with the Maldives, with a ₹4,850 crore line of credit at its core. “This will support infrastructure projects aligned with the priorities of the Maldivian people,” Modi said.
President Mohamed Muizzu, who once distanced his administration from New Delhi, struck a very positive tone. “Looking ahead, we are fully committed to further strengthening our cooperation with India across a broad range of sectors through high-level exchanges,” he said.
Modi is the first foreign leader to visit Muizzu since he took office in 2023, after campaigning to end the Maldives’ “India First” policy and pivoting toward closer ties with China. That shift triggered a brief chill in bilateral ties.
Relations began to thaw after India stepped in to help the Maldives avert a potential debt default, offering economic support as the tourism-dependent nation grappled with falling revenues in its $7.5 billion economy.
Another outcome was the signing of a network-to-network agreement between NPCI International and the Maldives Monetary Authority to enable India’s Unified Payments Interface (UPI) in the island nation. “Once the technical integration is completed, people will be able to use UPI in the Maldives,” Misri said.
India also agreed to ease the Maldives’ annual debt repayment obligations on existing Indian lines of credit, a move that signals New Delhi’s willingness to support Malé’s economic recovery. President Muizzu also condemned the recent terrorist attack in Pahalgam, expressing solidarity with India on counterterrorism efforts.
Rs 4,850 Cr line of credit: For Maldivian infrastructure and development projects
Debt relief pact: Reduction in the Maldives’ annual debt repayments to India
FTA negotiation: Formal launch of India-Maldives Free Trade Agreement talks
Investment Treaty: Move to finalise a bilateral investment protection agreement
Fisheries MoU: Cooperation in fisheries and aquaculture
Digital MoU: Sharing of India’s population-scale digital solutions
Pharmacopoeia MoU: Recognition of Indian Pharmacopoeia in the Maldives
UPI agreement: Network-to-network pact for enabling UPI in the Maldives
