Prime Minister Narendra Modi's recent visit to the Maldives signifies a significant step in revitalizing the relationship between India and the island nation following a period of strained ties. The two-day trip, which commenced on July 25, 2025, underscores India's commitment to bolstering its development partnership with the Maldives, where it competes with China for influence.
Modi's visit, the first by any foreign leader since President Mohamed Muizzu assumed office, included attending the Maldives' 60th Independence Day celebrations as the Guest of Honour. During the visit, several key agreements and Memorandums of Understanding (MoUs) were signed, signaling a renewed commitment to bilateral cooperation.
A major highlight of the visit was India's pledge of a ₹4,850 crore (approximately $565 million) line of credit to the Maldives. This credit line, denominated in Indian rupees, will support infrastructure development projects aligned with the Maldivian government's priorities, including strengthening the country's security forces, and improving healthcare, housing, and education. President Muizzu expressed his gratitude for India's continued assistance, emphasizing the importance of the export of essential commodities as a key facet of bilateral cooperation.
In addition to the line of credit, Prime Minister Modi and President Muizzu announced the launch of negotiations for a free trade agreement (FTA) between the two countries. This landmark initiative aims to strengthen the economic partnership between India and the Maldives, with both leaders expressing optimism for a swift conclusion to the negotiations. The FTA is expected to bring significant benefits to both nations, fostering increased trade and investment.
The discussions also covered the operationalization of the Unified Payments Interface (UPI) in the Maldives, following an agreement between the two countries. Furthermore, Modi stressed that India will remain the "first responder" for the Maldives, reaffirming India's commitment to providing assistance in times of need. He also pledged India's support for strengthening the Maldives' defense capabilities, emphasizing the shared goals of peace, stability, and prosperity in the Indian Ocean region.
President Muizzu acknowledged India as the Maldives' "closest and most trusted partner," highlighting India's crucial role in the Maldivian tourism sector. He expressed hope that Modi's visit would further boost tourism and enhance people-to-people connections. To facilitate increased tourism, discussions were held regarding the commencement of direct flights between the two countries.
The renewed focus on strengthening ties comes after a period of охлаждение in relations, following President Muizzu's election on an "India Out" campaign in 2023. Muizzu's initial decision to visit China before India and the removal of Indian military personnel from the Maldives raised concerns. However, diplomatic efforts and a recognition of mutual interests have paved the way for a reset in relations.
This visit underscores the strategic importance of the Maldives to India, aligning with India's "Neighbourhood First" policy and its vision for the Indian Ocean region. By strengthening its partnership with the Maldives, India aims to maintain its regional influence and support the island nation's economic and security interests.
