Modi extends ₹4,850 crore credit line to Maldives
What's the story
Indian Prime Minister Narendra Modi, who is on a two-day visit to the Maldives, has announced a new Line of Credit (LoC) worth ₹4,850 crore to the island nation. The financial aid is expected to support major infrastructure and development projects across the country. An amendment agreement was also signed, reducing the Maldives's annual debt repayment on previous Indian-funded LoCs.
Economic collaboration
Negotiations for India-Maldives Free Trade Agreement underway
In addition to the financial assistance, India and the Maldives have also started formal negotiations for an India-Maldives Free Trade Agreement (IMFTA). The agreement is aimed at boosting economic cooperation and enhancing bilateral trade between the two nations. India also announced the handing over of the remaining 3,300 housing units from the 4,000 housing units in Hulhumale under India's Buyers' Credit facilities and handed over 72 vehicles and other equipment to the Maldivian Ministry of Defense.
MOUs
Several MOUs signed
Furthermore, multiple Memorandums of Understanding (MOUs) were inked. These include agreements on fisheries and aquaculture, meteorological partnership between India's Institute of Tropical Meteorology and the Maldives Meteorological Services, and the exchange of scalable digital governance technologies. An MOU was also signed to recognize the Indian Pharmacopoeia, allowing for better trade in medicinal products. What's more, NPCI International Payments Limited and the Maldives Monetary Authority reached a network-level agreement to deliver India's Unified Payments Interface (UPI) to the Maldives.
Modi
For us it is always friendship first: Modi
The two also jointly released a commemorative stamp to mark the 60th anniversary of the establishment of formal diplomatic relations between the nations. Speaking from Malé, Indian PM Modi said, "For us it is always friendship first." "India is Maldives' closest neighbor. Maldives holds an important place in India's 'Neighborhood First' policy and 'MAHASAGAR' vision. India is proud of being the most trusted friend...Be it a crisis or pandemic, India has always stood with them as first responders."
Twitter Post
Shared vision becoming a reality: Modi
#WATCH | Malé, Maldives: PM Narendra Modi says, "Last year in October, during the President's visit to India, we shared a vision on extensive economic and maritime partnership. Now, this is becoming a reality. It is a result of that, that our relations are touching new heights.… pic.twitter.com/VFLqvnN9zO
— ANI (@ANI) July 25, 2025
Diplomatic milestone
Modi in Maldives at President Muizzu's invitation
PM Modi is in the Maldives at President Muizzu's invitation. Upon his arrival on Friday, PM Modi was welcomed by President Muizzu and other senior cabinet members, including the defense minister and foreign minister. Members of the Indian diaspora also gathered to welcome him, chanting "Vande Mataram" and "Bharat Mataa Ki Jai." After that, Modi held a one-on-one meeting before settling down for delegation-level talks, per PTI.
Commemorative gesture
Hope to better ties
The visit is seen as a diplomatic reset between New Delhi and Male, which had soured during Muizzu's tenure due to the "India Out" campaign and pro-China leanings. His initiatives within first few months of his presidency significantly damaged ties. Within hours, he sought the departure of Indian soldiers. India eventually replaced the personnel with civilians. Hoping to better the relationship, Muizzu invited Modi. He will be the Guest of Honor at the country's 60th Independence Day celebrations on Saturday.