Prime Minister Narendra Modi and Maldives President Mohamed Muizzu, at the President House in Malé on July 25
| Photo Credit:
ANI
Prime Minister Narendra Modi has said India would extend a ₹4,850 crore line of credit to Maldives on Friday following his meeting with Maldives President Mohamed Muizzu as the two leaders continued to work on building diplomatic bridges and cementing economic ties.
India and the Maldives also agreed to initiate negotiations on a bilateral free trade agreement (FTA) to boost trade between the two countries.
“Deeply touched by the gesture of President Muizzu to come to the airport to welcome me. I am confident that India-Maldives friendship will scale new heights of progress in the times to come,” Modi said in a social media post on Friday.
Modi is in Maldives for a two-day visit and will attend the country’s independence day celebrations as the guest of honour on Saturday.
Straddling sides
The building of bridges in diplomatic relations between the two countries is important as Muizzu is known to be a strong supporter of China and he assumed power in November 2023 by campaigning against Maldive’s relations with India.
Maldives is a story where political sagacity and economic imperatives have survived the myopic domestic discourse, said Ambassador Anil Trigunayat. “It also shows that while being vigilant we need not make any radical retaliatory changes to our policies on the basis of certain actions and statements . India ‘s neighbourhood has become more complex due to Chinese challenge and has to be handled ambidextrously . I think that’s what the Indian government is doing,” he told businessline
India also agreed to reduce the annual debt repayments (by 40 percent) owed by the island nation to New Delhi, in a move that is expected to greatly help Maldives’ economic situation.
“I am also pleased to announce the initiation of negotiations for a free trade agreement between India and Maldives. This landmark initiative marks a significant step forward in strengthening our economic partnership,” Muizzu said during a joint press conference with PM Modi in Male on Friday.
India is one of the largest development partners for Maldives through Lines of Credit, grants, buyer’s credit and capacity building programmes.
In 2024, India supported Maldives through the emergency financial assistance by way of $400 million and ₹3,000 crore currency swap lines and interest-free roll-over of $ 100 million Treasury bills, among others, per the government.
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Published on July 25, 2025
