Blitz Bureau
MALDIVIAN President Mohamed Muizzu on July 25 thanked India for its “pivotal role” in helping the island nation deal with its economic crunch and liquidity challenges, and said he and Prime Minister Narendra Modi have “charted a clear path” for future cooperation.
Mr. Muizzu’s statement came on the first day of Mr. Modi’s two-day state visit to the Indian Ocean archipelago, following his visit to the United Kingdom. There has been a steady reset in ties between the two nations since Mr. Muizzu visited India in October 2024, following a serious strain in the preceding year after Mr. Muizzu’s election.
“Maldives is an important part of India’s ‘neighbourhood first’ policy,” Mr. Modi said in his media statement in Male. In a social media post on the release of a stamp to mark 60 years of India-Maldives friendship, he said it commemorated “a very cherished friendship”.
Maldives thanks India for bailing it out of economic crisis
Following talks between the leaders, the two sides exchanged four Memoranda of Understanding (MoUs) and signed three agreements taking forward cooperation in several key sectors, including fisheries, aquaculture, tourism, environment, digital solutions, and finalising the terms of reference to launch negotiations of a Free Trade Agreement.
In an indication that economic partnership remains a major cornerstone of bilateral ties, India agreed to extend a fresh Line of Credit (LoC) of ₹4,850 crore, to support the island as it faces an enduring twin deficit problem. This is the first time that such credit is being extended to the Maldives in Indian rupee. Significantly, the two countries signed an amendatory agreement on reducing the Maldives’s annual debt repayment obligations. Following “a sharp 40%” reduction, Male would have to pay $29 million annually, instead of $51 million, as it repays an earlier $800-million LoC extended by India.