Context:

Prime Minister Narendra Modi recently visited the Maldives on July 25-26, 2025, at the invitation of President Dr. Mohamed Muizzu. This visit marked a significant diplomatic gesture, especially considering the recent tensions between the two nations.

• The visit celebrated two key milestones: the 60th Independence Day of the Maldives and the 60th anniversary of the establishment of diplomatic relations between India and the Maldives.

Background:

India and Maldives have traditionally shared close ethnic, linguistic, cultural, religious, and commercial ties. India was among the first countries to recognize the Maldives after its independence in 1965 and established diplomatic relations shortly thereafter.

Despite this, bilateral relations witnessed turbulence in 2023, following the election of President Muizzu, whose initial approach signaled a pivot away from India. However, subsequent visits, including Muizzu’s visit to India in 2024 and Modi’s 2025 visit to Malé, have led to a significant reset in bilateral engagement.

Key Outcomes of the 2025 Visit:

1. Strengthening Development Cooperation:

·         Line of Credit (LoC): India extended a fresh LoC worth ₹4,850 crore (approximately $565 million) for infrastructure and priority development projects in the Maldives.

·         Debt Relief: An amendatory agreement was signed reducing the Maldives’ annual debt repayment obligation from $51 million to $29 million on an earlier Indian LoC.

2. Trade and Economic Integration:

·         Free Trade Agreement (FTA): Terms of Reference (ToR) were finalized to begin negotiations on an India-Maldives FTA.

3. Digital and Financial Inclusion:

·         UPI Integration: A network-to-network agreement between NPCI International and the Maldives Monetary Authority was signed to enable the rollout of India’s Unified Payments Interface (UPI) in the Maldives.

4. Sectoral Cooperation:

·         MoUs were signed in key areas such as:

o    Fisheries and aquaculture

o    Meteorology and climate change (between IITM and Maldivian Meteorological Services)

o    Digital governance and population-scale digital solutions

o    Recognition of Indian Pharmacopoeia for drug standards

5. People-to-People Connectivity and Public Diplomacy:

·         Inauguration of:

o    3,300 social housing units in Hulhumale

o    Road and drainage systems in Addu City

o    72 heavy vehicles to the Maldivian Defence Ministry

o    Six High-Impact Community Development Projects (HICDPs)

Strategic and Geopolitical Implications:

• Maldives occupies a critical position in the Indian Ocean Region (IOR), sitting astride key Sea Lines of Communication (SLOCs). The strengthening of India-Maldives ties is essential to counterbalance Chinese strategic influence under the guise of economic investments and the Belt and Road Initiative (BRI).
• PM Modi’s presence as Guest of Honour at Maldives' Independence Day reflects India’s commitment to the “Neighbourhood First” and Security and Growth for All in the Region (SAGAR) doctrines.
• India’s model of development assistance — based on transparency, demand-driven projects, and capacity-building — offers a sustainable alternative to debt-based models of foreign engagement.

Conclusion:

PM Modi’s 2025 visit produced tangible outcomes in trade, infrastructure, digital integration, and cultural diplomacy. It signifies India’s evolving regional leadership, based on partnership, mutual respect, and shared prosperity in the Indian Ocean.