In a landmark decision aimed at deepening bilateral relations, India has pledged a financial support package of over ₹6,300 crore to help the Maldives overcome its ongoing foreign exchange crisis. This announcement came following a high-level meeting between Indian Prime Minister Narendra Modi and Maldivian President Mohamed Muizzu in New Delhi, marking a significant shift in relations between the two neighboring countries.
A Renewed Partnership Amid Economic Challenges
During their discussions, both leaders emphasized the need to strengthen economic and maritime security ties. The aid package is part of a broader vision that includes a currency swap agreement worth $400 million and ₹30 billion (₹3,000 crore), aimed at addressing the immediate liquidity challenges faced by the Maldives.
This initiative is part of India’s ongoing commitment to support the Maldives during times of economic stress. Earlier this year, the State Bank of India (SBI) rolled over treasury bills worth $100 million to prevent a default on Maldivian bond payments, demonstrating India’s role as a reliable partner in the region.
Expanding Cooperation Beyond Finance
The discussions between the two leaders went beyond immediate financial support. Modi and Muizzu launched new initiatives to enhance maritime security, with India agreeing to provide radar systems and other surveillance equipment to bolster the Maldives’ maritime defense capabilities. This partnership is critical for the Maldives, which faces challenges like illegal fishing, drug trafficking, and terrorism in its vast exclusive economic zone.
Additionally, the meeting saw the launch of India’s RuPay Card in the Maldives to boost economic cooperation and tourism. The two sides also inaugurated the new runway of Hanimaadhoo International Airport, a project completed with an Indian line of credit worth $132 million.
Strengthening Defense and Security
India’s role in enhancing the Maldivian National Defence Force’s (MNDF) operational capabilities was another key highlight of the talks. India will provide defense platforms, repair a naval patrol vessel, and share expertise on hydrographic matters. A new memorandum of understanding (MoU) was also signed between India’s Rashtriya Raksha University and the Maldives’ National College of Policing and Law Enforcement to enhance cooperation in law enforcement and policing.
A New Chapter in India-Maldives Relations
This meeting represents a significant thaw in relations, which had cooled after Muizzu’s “India Out” election campaign and his efforts to bolster ties with Beijing and Ankara. The discussions, however, have led to a promising reset in bilateral ties. Muizzu, while acknowledging the Maldives’ previous stance, described India as a “true friend” and emphasized the importance of a democratic and resilient Maldives for peace in the Indian Ocean region.
As the Maldives gears up to celebrate the 60th anniversary of diplomatic relations with India in 2025, the future of India-Maldives ties looks bright. Modi has accepted Muizzu’s invitation to visit the Maldives next year, further solidifying the renewed partnership between the two nations.
This comprehensive aid package and enhanced cooperation across various sectors demonstrate India’s commitment to fostering stability and prosperity in the Indian Ocean region. With economic resilience, defense collaboration, and shared goals for regional peace, India and the Maldives are set to embark on a new chapter of cooperation and mutual growth.