Maldives President Muizzu thanks India for ‘pivotal’ economic assistance
India, Maldives exchange four MoUs, sign three agreements across sectors during PM Modi’s visit
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Maldivian President Mohamed Muizzu on Friday (July 25, 2025) 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.
Mr. Modi’s visit is seen as reflecting a significant improvement in India’s relationship with a crucial neighbour. “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”.
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. “We expect several infrastructure projects to be carried out using this LoC,” Foreign Secretary Vikram Misri later told a press conference in Male.
Significantly, the two countries signed an amendatory agreement on reducing the Maldives’s annual debt repayment obligations. Following “a sharp 40%” reduction, as Mr. Misri put it in the media conference, Male would have to pay $29 million annually, instead of $51 million, as it repays an earlier $800-million LoC extended by India.
Observers of India-Maldives ties see the renewed collaboration between the countries as a necessary and positive development. Former Foreign Minister of the Maldives, Ahmed Shaheed, who is currently a professor of law at the University of Essex, U.K., said the visit of Mr. Modi “is arguably the most impactful visit to Maldives by an India leader ever”.
“It signifies a remarkable turnaround in the relationship which had reached an all-time low under the current government in Maldives which came to office with an Indophobic mindset. Delighted to see the decades-old relationship restored. Both PM Modi and President Muizzu should be applauded for this restoration. This is also in line with the long-term interests of both countries,” he told The Hindu.
On Sunday, Mr. Modi will meet with the Indian community in Male and later attend the special event to mark the 60th Independence Day of the Maldives.
2025-07-26
By
Anushka Tripathi
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