Indian Prime Minister Narendra Modi has offered the Maldives a $565 million line of credit during his official visit to Malé. The announcement marks a renewed chapter in India Maldives relations, signaling deeper economic and strategic cooperation across infrastructure, defense, and trade.
What the Financial Support Includes ?
Modi described the $565 million credit line as key to supporting Maldives’ infrastructure and defense priorities. The funds will help finance projects in healthcare, housing, education, and transport connectivity, aligning with Maldivian national plans.
India also agreed to ease debt repayment by reducing interest obligations on previous loans by 40 percent. Maldives’ President Mohamed Muizzu said the support reflects India’s role as its most trusted development partner.
Modi’s Visit Signals a Diplomatic Reset
This was Modi’s first official visit since Muizzu assumed office in 2023, a period when bilateral ties had briefly cooled due to Muizzu’s pro-China rhetoric and his request for the withdrawal of Indian military personnel. However, the visit has signaled a diplomatic reset, with both sides expressing a commitment to collaboration over competition.
During the visit, India and the Maldives initiated discussions for a free trade agreement and a bilateral investment treaty, laying the groundwork for deeper economic and commercial ties. These talks indicate a mutual understanding that long-term regional stability and prosperity depend on strong partnerships built on trust and shared economic growth.
Countering China’s Growing Influence in the Region
Countering China’s Growing Influence in the Region
India’s renewed outreach to the Maldives is also viewed as part of its strategic efforts to counter China’s influence in the Indian Ocean. The Maldives’ increasing engagement with Beijing under President Muizzu had raised concerns in New Delhi, especially given China’s ongoing infrastructure investments and its Belt and Road Initiative projects in the region.
By providing a substantial line of credit, easing debt obligations, and committing to long-term strategic projects, India is positioning itself as a reliable and stabilizing partner. This support not only strengthens Maldives’ infrastructure and defense capabilities but also ensures that regional security and trade remain balanced and free from overdependence on any single global power.
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