India and the Maldives took significant steps to reinforce their bilateral relations, signing a currency swap agreement and agreeing to further development cooperation. The pact aims to address the Maldives’ financial crisis, with a focus on infrastructure development across the island nation.
During Maldivian President Mohamed Muizzu’s five-day state visit, he held talks with Indian Prime Minister Narendra Modi at Hyderabad House in New Delhi. Key agreements included the construction of ports, road networks, schools, and housing projects. India also handed over 700 social housing units in Hulhumale, built with the help of EXIM Bank’s buyer’s credit facilities.
In a significant move, the RuPay card was launched in the Maldives, marking a step toward deeper financial integration between the two nations. Modi also announced a $400 million support package to help the Maldives tackle its ongoing financial challenges. Additionally, a currency swap agreement worth Rs 3,000 crore was inked, designed to stabilize the Maldivian economy.
The two sides agreed on a “Vision for Comprehensive Economic and Maritime Security Partnership.” This strategic document outlines areas of cooperation, including economic development and security in the Indian Ocean Region. Both leaders emphasized that this partnership is people-centric and future-oriented, aimed at enhancing stability.
Several infrastructure projects were inaugurated, including the newly redeveloped Hanimaadhoo International Airport. Both nations also agreed to expedite the Greater Male Connectivity Project, which includes building a new commercial port on Thilafushi Island to alleviate congestion at Male’s port. They also explored collaboration on developing transshipment facilities and bunkering services at Ihavandhippolhu and Gaadhoo islands.
India will assist in developing the Hanimaadhoo and Gan airports, among others, with the goal of transforming them into economic hubs. The two leaders also discussed creating an ‘Agriculture Economic Zone’ and tourism investments in Haa Dhaalu atoll. A fish processing and canning facility at Haa Alifu atoll will also be set up with Indian help.
Modi and Muizzu decided to initiate discussions on a Free Trade Agreement (FTA) to further boost economic ties. The prime minister described the Maldives as a close friend and a key player in India’s neighbourhood policy and SAGAR (Security and Growth for All in the Region) vision.
President Muizzu, who had previously championed an ‘India out’ campaign, has since softened his position. He sacked ministers critical of India and Modi, signaling a desire to rebuild relations. The ceremonial welcome at Rashtrapati Bhawan, and Muizzu’s visit to Rajghat to pay respects to Mahatma Gandhi, symbolized this warming of ties.
To aid the Maldives’ struggling economy, India agreed to roll over a $50 million Treasury Bill for another year, offering crucial budgetary support. This move is expected to stabilize the Maldivian economy, which has been under severe strain
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