 "Prime Minister Narendra Modi along with Maldives' President Mohamed Muizzu.")
India is proud to be the most trusted friend of the Maldives, Prime Minister Narendra Modi said on Friday after announcing a Rs 4,850 crore line of credit to the island nation.
PM Modi also announced that the two countries will work towards finalising a bilateral investment treaty and that negotiations for a free trade pact have already started.
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, the prime minister said.
Mutual cooperation in the field of defence and security is a testament to mutual trust, he said, adding that India will always support the Maldives to strengthen its defence capabilities.
“This Line of Credit represents a continuation of the tradition of assistance to the development needs of the Maldives,” Foreign Secretary Vikram Misri said, adding that the funds are expected to support a range of infrastructure projects that will benefit the Maldivian people.
In addition to the new credit line, the two sides also signed a mandatory agreement amending an existing dollar-denominated line of credit. The revision is set to significantly ease the Maldives’ debt burden, slashing its annual repayment obligations by 40 per cent from nearly $51 million to $29 million.
The credit extension and debt restructuring come amid efforts by both countries to strengthen bilateral ties with PM Modi’s visit being the first by a foreign head of state or government during President Muizzu’s term.
Modi landed in Male this morning to a warm welcome with Muizzu and a number of top ministers of his government receiving the prime minister at the Velena international airport, reflecting the importance Male attached to the trip.
Hours later, Modi was accorded a colourful ceremonial welcome and a guard of honour at the iconic Republic Square.
“Deeply touched by the gesture of President Muizzu to come to the airport to welcome me. I am confident that India-Maldives friendship will scale new heights of progress in the times to come,” Modi said in a social media post.
The two leaders held a one-on-one meeting before settling down for delegation-level talks.
The turnaround in the bilateral ties assumes significance as Muizzu, known to be close to China, came to power in the island nation in November 2023 on the back of an “India Out” campaign.
His policies in the first few months of his presidency resulted in severe strain in the ties. Within hours of his oath, he had demanded the withdrawal of Indian military personnel from his country. Subsequently, India replaced the personnel with civilians.
The Indian military personnel were deployed to the Maldives to maintain and operate two helicopters and an aircraft, which were used for humanitarian and rescue operations.
It is widely believed that New Delhi’s sustained efforts, including its assistance to the island nation to deal with economic woes, helped bring the relations back on track.
The Maldives is one of India’s key maritime neighbours in the Indian Ocean Region and the overall bilateral ties, including in areas of defence and security, witnessed an upward trajectory under the previous governments in Male.