Prime Minister Narendra Modi said on Friday that India is proud to be the Maldives’ most trusted friend. He made this remark while announcing a fresh Rs 4,850 crore line of credit for the island country.
Focus on trade and investment
Modi shared that both countries are working to finalise a bilateral investment treaty. He also confirmed that talks for a free trade agreement have already begun.
He said the Maldives plays a key role in India’s “Neighbourhood First” policy and its MAHASAGAR vision (Mutual and Holistic Advancement for Security and Growth Across Regions).
Held very fruitful discussions with President Muizzu. Maldives is at the core of our ‘Neighbourhood First’ and Mahasagar Vision. Our discussion covered several sectors, notably commercial and cultural linkages. We both agree that the India-Maldives friendship will always be… pic.twitter.com/wNlXkx3suz
— Narendra Modi (@narendramodi) July 25, 2025
Defence and security cooperation
Modi highlighted the strong defence and security partnership between the two nations. He said this cooperation reflects the mutual trust they share. He assured, “India will always support the Maldives to strengthen its defence capabilities.”
New credit line supports infrastructure
Foreign Secretary Vikram Misri explained that this new credit line is a continuation of India’s support for the Maldives. “This Line of Credit represents a continuation of the tradition of assistance to the development needs of the Maldives,” Misri said.
He added that the funds would support various infrastructure projects meant to benefit the Maldivian people.
Debt relief through agreement amendment
Along with the new loan, India and the Maldives signed an agreement to revise an existing dollar-based credit line. The change will cut the Maldives’ annual repayments by 40 percent, from nearly $51 million to $29 million.
This revision is expected to ease the island nation’s debt burden significantly.
Modi’s visit highlights improving relations
PM Modi’s visit marks the first trip by any foreign head of state or government since President Mohamed Muizzu took office.
Modi arrived in Male on Friday morning to a warm welcome. President Muizzu and his senior ministers received him at Velena International Airport, showing the value Male places on the visit.
Later, Modi received a ceremonial welcome and a guard of honour at Republic Square. In a social media post, he said, “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.”
From strained ties to a fresh start
Before holding delegation-level talks, Modi and Muizzu had a one-on-one meeting.
Their discussions come at a time when ties between India and the Maldives are improving. When Muizzu became president in November 2023, he had pushed an “India Out” campaign and demanded that Indian military personnel leave the country.
India responded by replacing the soldiers with civilians. The Indian troops were earlier operating two helicopters and an aircraft used for humanitarian and rescue missions in the Maldives.
India’s support turns tide
Observers believe that India’s consistent support, especially in helping the Maldives manage its economy, has played a major role in improving ties.
The Maldives is an important maritime neighbour of India in the Indian Ocean Region. Over the years, the two countries have built strong cooperation, especially in defence and security, under past Maldivian governments.