The Ministry of External Affairs (MEA) held a special briefing today as India extends a line of credit of Rs 4,850 crore to the Maldives. This financial assistance arrives as Prime Minister Narendra Modi commences a two-day state visit to the island nation at the invitation of President Mohamed Muizzu. The visit holds significance as it coincides with the Maldives' 60th Independence Day and the 60th anniversary of diplomatic relations between India and the Maldives.
During the MEA briefing, officials highlighted India's continued commitment to supporting the Maldives in overcoming its financial challenges. Foreign Secretary Vikram Misri noted that the Maldives has fully utilized the USD 400 million swap facility previously extended by India. He also mentioned that a separate INR 30 billion swap line is currently in use.
India's support for the Maldives is multifaceted, including financial assistance, infrastructure development, and capacity building. Besides the recent line of credit, India has been facilitating the subscription of treasury bills by the State Bank of India (SBI) and rolling them over annually, interest-free, to the Government of Maldives since March 2019. This arrangement serves as emergency financial assistance to the maritime neighbor. In May 2025, India rolled over a USD 50 million Treasury Bill at the request of the Maldives government.
The relationship between India and the Maldives has seen a recalibration recently. While President Muizzu's election campaign was marked by an "India Out" stance, he has since adopted a more pragmatic approach, recognizing the importance of economic cooperation with India. This shift is evident in the numerous high-level visits between the two countries in the first half of 2025, including a visit by Foreign Minister Abdulla Khaleel to India in January.
PM Modi's visit is expected to further solidify the India-Maldives Joint Vision for a Comprehensive Economic and Maritime Security Partnership, which was adopted during President Muizzu's visit to India in October 2024. Key areas of focus include expanding the reach of India's Unified Payments Interface (UPI) in the Maldives, exploring direct digital connectivity for public services, and boosting bilateral tourism. Discussions are also underway for a Free Trade Agreement (FTA) and an investment treaty between the two countries, with exploration of cooperation in renewable energy and fisheries.
India has been a major contributor to infrastructure development in the Maldives through grants and concessional credit. The Greater Malé Connectivity Project, which connects four islands in the Maldives, stands as the largest infrastructure initiative India has ever supported in a neighboring country. Other projects underway include roads, airports, and fisheries processing units. India is also assisting with social housing projects.
During his visit, PM Modi and President Muizzu jointly issued a commemorative stamp to mark the 60th anniversary of diplomatic relations. Both leaders witnessed the signing of four MoUs and three agreements in key areas, including the line of credit agreement. Additionally, the Government of India is providing 72 heavy vehicles to the Maldivian Ministry of Defence.
PM Modi emphasized the deep-rooted ties between the two nations, stating that India is the Maldives' closest neighbor and lauding the bilateral relations. He highlighted steps taken to speed up the economic partnership, including working towards finalizing a Bilateral Investment Treaty and initiating talks on a Free Trade Agreement. With the local currency settlement system, direct trade between Rupee and Rufiyaa will be possible.
India considers the Maldives a key maritime neighbor and an important partner in its "Neighbourhood First" policy and Vision SAGAR (Security and Growth for All in the Region). Defense and security cooperation have been major areas of collaboration since 1988, with India providing the largest number of training opportunities for the Maldivian National Defence Force.
