On Friday, July 25, 2025, Maldivian President Mohamed Muizzu publicly thanked India for its "pivotal role" in helping the island nation navigate its ongoing economic and liquidity crisis. The statement came during Indian Prime Minister Narendra Modi’s state visit to the Maldives—his first since Muizzu took office and a clear signal of improving bilateral ties after a tense year.
Speaking at a joint press conference in Malé, Muizzu said he and PM Modi had “charted a clear path” for future cooperation. The visit marks a notable thaw in India-Maldives relations, which had soured following Muizzu’s election but have gradually improved since his visit to India in October 2024.
During the first day of Modi’s two-day trip, the two nations exchanged four Memoranda of Understanding (MoUs) and signed three agreements covering sectors such as fisheries, tourism, digital solutions, environment, and aquaculture. Importantly, both countries finalized terms to begin negotiations on a Free Trade Agreement.
A highlight of the visit was India’s decision to extend a new ₹4,850 crore (USD 565 million) Line of Credit to the Maldives—India’s first such credit in Indian Rupees to the island nation. According to Indian Foreign Secretary Vikram Misri, the fresh LoC will help fund critical infrastructure projects.
In a significant relief for the Maldivian economy, India also agreed to amend repayment terms on an earlier $800 million credit line, slashing annual repayments from $51 million to $29 million, a 40% reduction. This move is expected to ease pressure on the Maldives’ fragile economy, which continues to struggle with twin deficits.
“This visit reflects the strength of our ties and India's commitment to the 'Neighbourhood First' policy,” Modi said in his address. He also participated in a stamp release marking 60 years of diplomatic friendship between the two nations, calling it a symbol of a “cherished friendship.”
Foreign policy observers hailed the visit as a major reset in bilateral ties. Former Maldivian Foreign Minister Ahmed Shaheed described it as “arguably the most impactful visit by an Indian leader to the Maldives,” highlighting its role in reversing a period of strained relations. “Both leaders deserve credit for restoring this vital partnership,” he added.
(This story is published from a syndicated feed)