Image Credit: pmindia.gov.in
India Extends ₹4,850 Crore Credit Line to Maldives
India has announced a ₹4,850 crore (approximately USD 565 million) line of credit to the Maldives during Prime Minister Narendra Modi’s official visit to the island nation. This major financial assistance aims to support development in sectors such as infrastructure, housing, renewable energy, health, and defense.
Financial Support in Indian Rupees
For the first time, the line of credit has been extended in Indian rupees rather than U.S. dollars. This shift is designed to ease repayment pressure on the Maldives and boost rupee-denominated trade. India has also amended earlier agreements to reduce the Maldives’ annual debt servicing obligation by 40 percent, lowering it from USD 51 million to USD 29 million.
Free Trade Talks Begin
India and the Maldives formally launched discussions on a Free Trade Agreement (FTA) during the visit. Several Memorandums of Understanding (MoUs) were signed to promote cooperation in various sectors, including fisheries, aquaculture, digital transformation, weather monitoring, financial services, and health. Notably, India’s UPI digital payments system will be integrated into Maldivian banking systems in the near future.
Strengthening Ties with the New Government
Prime Minister Modi received a grand welcome in Male, with ceremonial honours and cultural performances. He is also attending the Maldives’ 60th Independence Day celebrations on July 26 as Guest of Honour. This visit marks the first by a foreign leader under President Mohamed Muizzu’s administration, which took office in November 2023.
The trip is being viewed as a diplomatic reset following recent strains in bilateral ties, with India reaffirming its position as a trusted development partner in the region.
