Following Indian Prime Minister Narendra Modi’s visit to the Maldives and the announcement of a new $565 million line of credit (LoC) for the island nation, India and the Maldives have revitalized their bilateral relationship.
In line with the development priorities of the Maldivian government under President Mohamed Muizzu, this credit line, which is valued at approximately Rs 4,850 crore in Indian rupees, is meant for priority infrastructure and development projects in important areas like defense, healthcare, education, housing, and sports.
One of the agreements signed during the visit, which marked the 60th anniversary of Maldivian independence and diplomatic relations with India, was to cut the Maldives’ yearly debt payback load on Indian loans by 40%, from roughly $51 million to $29 million.
This funding supports previous aid that was given to the Maldives to help handle liquidity issues, such as a $400 million US dollar currency swap and other economic aid initiatives.
Additionally, India and the Maldives confirmed their intention to further their economic cooperation by negotiating a free trade agreement (FTA) and bilateral investment pact. With the goal of moving “from paperwork to prosperity,” or promoting easier trade and investment flows between the two nations, formal talks on these trade agreements have begun.
Cooperation in defense and security was also emphasized during the visit. In the Maldives, Modi officially opened a brand-new military ministry building that was built with Indian help. Amid worries over China’s influence, India reaffirmed its strategic alliance in the Indian Ocean region by pledging to continue supporting the Maldives’ defense capabilities.
Relations have greatly improved despite a challenging beginning to Muizzu’s presidency, which included the previous dismissal of Indian military personnel and certain pro-China stances.
In an effort to revive relations, the two leaders established a Comprehensive Economic and Maritime Security Partnership after Muizzu made it plain he would not jeopardize India’s security interests. Modi reaffirmed the long-standing, close ties between the Maldives and India, calling the latter the “most reliable partner.”
With an emphasis on economic growth, security, and greater integration, these initiatives represent a thorough rebuilding and fortification of India-Maldives relations following previous strained periods.
