Why in News: Prime Minister Narendra Modi’s state visit to the Maldives marks a significant improvement in bilateral ties
Background of India–Maldives Tensions
- ‘India Out’ Campaign: A political movement in the Maldives opposing Indian military presence, amplified after President Muizzu’s 2023 election.
- Tourism Row: PM Modi’s visit to Lakshadweep was seen as a tourism rival move, triggering anti-India remarks from Maldivian leaders. In response, many Indians canceled Maldives travel plans, highlighting regional hypernationalism.
- Hydrographic Survey Issue: Maldives revoked a pact allowing India to conduct joint maritime surveys, citing sovereignty and intelligence concerns, raising strategic red flags for India.
Occasion for Reset:
PM Narendra Modi visited the Maldives on a two-day state visit and participated in the 60th Independence Day celebrations of the island nation, signaling a new chapter in bilateral relations.
High-Level Engagements:
- PM Modi held talks with President Mohamed Muizzu, Vice-President Uz. Hussain Mohamed Latheef.
Major Outcomes:
1. Agreements Signed
Line of Credit (LoC): ₹4,850 crore LoC extended by India to:
- Reduce Maldives’ annual debt repayment on Indian government-funded loans.
- Support developmental projects.
Unified Payments Interface (UPI):
- Agreement signed to enable UPI in Maldives, boosting digital connectivity and tourism.
Proposed Free Trade Agreement (FTA):
- Terms of Reference finalized to begin negotiations on an FTA between India and Maldives.
2. Memoranda of Understanding (MoUs) Exchanged
Six MoUs signed in the following sectors:
- Fisheries and Aquaculture
- Meteorology
- Digital Public Infrastructure
- Fintech (UPI)
- Indian Pharmacopoeia Standards
- Health Cooperation
3. Project Inaugurations and Handovers
Housing Infrastructure:
- 3,300 social housing units inaugurated in Hulhumalé under India’s Buyer’s Credit facilities.
Urban Development:
- Roads and Drainage System Project completed in Addu City.
Healthcare Cooperation:
- Two Aarogya Maitri Health Cube (BHISHM) kits handed over to Maldives for emergency health preparedness.
Significance of the Reset
1. Strategic Foreign Policy Shift
- Muizzu moves from “India Out” to pragmatic cooperation, balancing sovereignty and national interest.
2. Economic Relief
- India provided a $565 million credit line, currency swap, and debt restructuring—reducing Maldives’ repayment burden by ~40%.
3. Defence & Maritime Security
- Renewal of Indian helicopters/Dornier lease, radar network, and joint surveillance strengthens India’s maritime role.
4. Infrastructure Boost
- Projects like the Greater Malé Connectivity Project, housing, and port upgrades strengthen India’s developmental role.
5. Digital & People-to-People Ties
- Launch of UPI & RuPay, new consulates, educational and institutional cooperation enhance connectivity.
6. Trade & Currency Cooperation
- Talks on a Free Trade Agreement, rupee-rufiyaa trade, and investment treaty deepen economic integration.
7. Regional Strategic Importance
- Counters China’s influence in the Indian Ocean; supports India’s Neighbourhood First and SAGAR vision.
Statements by Leaders:
Prime Minister Narendra Modi:
- Emphasized the “bipartisan support” in the Maldives for its “strong and time-tested friendship” with India.
President Mohamed Muizzu:
- Stated that India remains the Maldives’ “closest and most trusted partner”.
UPSC RELEVANCE
GS Paper 2 – International Relations
- Bilateral Relations: Reset of India-Maldives ties amid shifting geopolitical alignments in the Indian Ocean Region.
- India’s Neighbourhood First Policy: How India balances strategic and developmental cooperation
MAINS PRACTICE QUESTION
Q. India’s engagement with Maldives has witnessed a pragmatic reset in recent months. In light of PM Modi’s 2025 visit, critically examine the strategic and diplomatic significance of this shift.