PM Modi offers $565 mn credit line to Maldives, opens door for FTA

PM Modi also reiterated India's commitment to supporting Maldives' defence capabilities, given it is seeking to maintain its influence amid a growing Chinese presence

India will extend a $565 million line of credit to the Maldives as part of a renewed push to deepen bilateral ties, Prime Minister Narendra Modi said on Friday, following high-level talks with Maldives President Mohamed Muizzu in Male.

 

The two sides also agreed to begin negotiations for a Free Trade Agreement (FTA) and move forward on a bilateral investment treaty, signalling a broader economic and strategic reset after months of strained relations.

 

“India is also proud to be the most trusted friend of the Maldives,” PM Modi said after the meeting, highlighting the island nation's significance in India’s ‘Neighbourhood First’ and ‘MAHASAGAR’ (Maritime and Security and Growth for All in the Region) vision.

 

The Rs 4,850 crore credit line — equivalent to nearly $565 million — is expected to finance infrastructure and development projects in the Maldives, where India is seeking to maintain influence amid a growing Chinese presence.

 

The two leaders also reaffirmed mutual cooperation in defence and maritime security. “Mutual cooperation in the field of defence and security is a testament to mutual trust,” PM Modi said, adding, “India will always support the Maldives to strengthen its defence capabilities.”

 

The meeting marks the first in-person interaction between Modi and Muizzu since the latter took office last year amid tensions over his pro-China tilt and calls for Indian military personnel to leave the island nation, which was implemented shortly after his electoral win. 

Modi landed in the Maldives on Friday (July 25) for a two-day official visit, where he will serve as the chief guest at the country’s 60th Independence Day celebrations. 

Upon arrival, he was welcomed by Maldivian President Mohamed Muizzu, and was greeted with a traditional cultural performance by schoolchildren. 

This marks the first official state visit hosted by President Muizzu since he assumed office in November 2023, according to Foreign Secretary Vikram Misri. 

The Indian prime minister’s visit to the Maldives comes immediately after a two-day trip to the United Kingdom, where India and the UK signed a landmark trade agreement aimed at boosting bilateral commerce by cutting tariffs on automobiles, textiles, spirits and several other goods.

   

(With agency inputs)