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Diplomacy: Resetting relations with the Maldives, India offers $550 mn LoC

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Virendra Pandit

 

New Delhi: A year after the Maldives-India relations hit a historic low, the two countries appear to have reset the trajectory of their bilateral ties with Prime Minister Narendra Modi’s visit to the island nation as the Guest of Honor at its Independence Day celebrations on Saturday.

During his two-day visit, Prime Minister Modi on Friday said that India is proud to be the Maldives’ most trusted friend, and announced a line of credit (LoC) for USD 550 million Rs.4,850 crore) to support infrastructure development in the island nation.

With President Mohamed Muizzu by his side, the two countries witnessed the exchange of six MOUs in the fields of fisheries and aquaculture, meteorology, digital public infrastructure, UPI, and Indian pharmacopoeia, the media reported.

PM Modi’s visit signals a significant improvement in the India-Maldives relations after more than a year of tension. He also revealed that the two nations are moving forward with negotiations for a bilateral investment treaty and have already begun talks on a free trade agreement.

He emphasised that New Delhi is proud to be the “most trusted” friend of the Indian Ocean archipelago. “For us, it is always friendship first,” he said in a media statement, adding the “roots of our relations are older than history, and as deep as the ocean.”

The Maldives holds an important place in India’s “Neighbourhood First” policy and MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions) vision, he said.

The two leaders also virtually inaugurated a roads and drainage system project in Addu city and six High Impact Community Development Projects in other cities. PM Modi handed over 3,300 social housing units and 72 vehicles for the Maldives National Defence Force and the Immigration authorities.

PM Modi also handed over two units of Aarogya Maitri Health Cube (BHISHM) sets to the Maldives. With state-of-the-art medical equipment as part of the cube, it can provide medical aid to 200 casualties with in-built support to sustain a crew of six medical personnel for up to 72 hours.

The recent improvement in India-Maldives relations is particularly notable given the initial strain under President Mohamed Muizzu, who took office in November 2023 after campaigning on an “India Out” platform and later his pro-China stand and policies.

Tensions escalated quickly after Muizzu’s inauguration, when he called for the withdrawal of Indian military personnel from the Maldives. In response, India replaced its military presence with civilian personnel to ease diplomatic friction.

The Maldives remains one of India’s key maritime partners in the Indian Ocean Region, and bilateral ties in defence and security had strengthened significantly under previous Maldivian administrations.

However, PM Modi’s visit this week is the clearest signal yet of the normalisation of ties. Over two days in Male, he met with President Muizzu and key Maldivian leaders, including Vice-President Uz Hussain Mohamed, People’s Majlis Speaker Abdul Raheem Abdulla, and former President Nasheed.

In a statement posted on social media, PM Modi said, “Our nations continue to work closely in sectors like infrastructure, technology, climate change, energy and more. This is greatly beneficial to our people. We look forward to deepening this partnership in the years to come.”