Modi Announces Major Financial Support During Maldives Visit to Strengthen Bilateral Relations

During his recent trip to the Maldives, Indian Prime Minister Narendra Modi declared a significant $565 million line of credit aimed at bolstering infrastructure and development initiatives in the island nation. This announcement took place amidst formal discussions on establishing a free-trade agreement between the two countries and was made during a joint media conference with Maldives President Mohamed Muizzu.

Modi's visit, marking the 60th anniversary of the Maldives' independence, is particularly important considering the ongoing rivalry between India and China for influence in the strategically crucial Indian Ocean region. Relations have fluctuated due to the recent election of pro-China President Muizzu in 2023, leading to a period of heightened diplomatic tensions following the previous administration’s pro-India stance.

On this two-day visit, Modi observed the signing of various agreements aimed at enhancing cooperation in key sectors, including fisheries, tourism, health, and digital development. He also provided numerous heavy vehicles to the Maldives' defense forces, underscoring India’s commitment to assist the Maldives in strengthening its defense capabilities. Emphasizing the importance of their partnership, Modi stated that India remains the Maldives’ closest neighbor and that both nations share a mutual goal of peace, stability, and prosperity in the Indian Ocean.

This trip follows previous financial support from India to the Maldives, including a $100 million treasury bills rollover and a $400 million currency swap agreement designed to alleviate the Maldives' economic challenges. Since Muizzu's election, which raised concerns in New Delhi due to his inclination towards Beijing, the relationship had become strained, especially after his commitment to reducing Indian military presence in the Maldives.

In recent months, however, there have been signs of easing tensions between the two nations. After initially strong anti-Indian sentiments, Muizzu has moderated his stance and improved communication with India amidst concerns about the Maldives' economic stability. India has historically played a significant role in the developmental progress of the Maldives, while the Maldives' inclusion in China’s Belt and Road Initiative marks a significant pivot in the region's geopolitical landscape.

Modi is set to participate in the Maldives' celebrations commemorating its 60 years of independence from British rule, reinforcing the importance of India-Maldives ties in navigating regional dynamics.