Comprehensive Economic and Maritime Security Partnership
During their discussions, the two leaders unveiled a blueprint for a Comprehensive Economic and Maritime Security Partnership, which aims to strategically enhance cooperation across multiple sectors. Modi emphasized India’s role as a key partner and supporter for the Maldives, particularly during times of crisis, stating, “Maldives has an important place in both our ‘Neighbourhood First’ policy and ‘SAGAR’ Vision.”
Financial Support and Currency Swap Agreement
A pivotal aspect of their talks was the agreement on a currency swap that grants the Maldives access to USD 400 million in financial assistance, along with an additional ₹30 billion (approximately USD 3.6 million). President Muizzu expressed gratitude for this support, stating it would play an instrumental role in addressing the country’s foreign exchange challenges.
This financial assistance follows earlier commitments from India to rollover Treasury Bills subscribed by the State Bank of India, totaling USD 100 million in May and September 2024, which have provided a much-needed financial cushion for the Maldives.
Infrastructure Development Initiatives
India has also committed to various infrastructure projects in the Maldives. The recent inauguration of the redeveloped Hanimaadhoo International Airport and the agreement to expedite the Greater Male Connectivity Project highlight India’s continued support. Additionally, the leaders discussed developing a commercial port on Thilafushi Island, enhancing its cargo handling capacity to alleviate congestion at Male port.
Modi also announced the launch of the RuPay card in the Maldives and plans to establish connections through the Unified Payments Interface (UPI) in the future, reflecting a commitment to improving digital connectivity between the two nations.
Strengthening Defence and Maritime Security
The talks included a focus on defence and security cooperation, acknowledging shared challenges in the Indian Ocean region, such as piracy and drug smuggling. The leaders reaffirmed their commitment to advancing maritime security for mutual benefit and regional stability.
India will continue to support the Maldives with defence platforms and capabilities, while also providing assistance for the ongoing Maldives National Defence Force (MNDF) ‘Ekatha’ harbour project. Modi assured that India would share expertise and resources to enhance the Maldives’ operational capabilities.
Political Context and Previous Tensions
This meeting comes after a period of strained relations, particularly during Muizzu’s election campaign, which emphasized an ‘India Out’ agenda. Despite initial tensions, including critical remarks made by Maldivian ministers about Modi, Muizzu has since worked to reassure India of the Maldives’ commitment to friendly ties. He stressed that the Maldives would not engage in actions that undermine India’s security, asserting that the relationship is built on respect and shared interests.
Muizzu has also taken steps to distance his administration from previous criticisms of India by dismissing ministers who made derogatory comments. In a recent interview, he reiterated that Indian tourists are welcomed in the Maldives and highlighted the positive contributions they make to the local economy.
Looking Ahead
As both leaders seek to reinforce and expand the relationship, the establishment of a High-Level Core Group is aimed at overseeing the implementation of the new partnership framework. The group will facilitate exchanges at various levels, including parliamentary and local government representatives.
In summary, the recent meetings between India and the Maldives signal a new era of cooperation focused on economic support, infrastructure development, and maritime security. The commitment to build a strategic partnership reflects a mutual understanding of shared interests and the importance of stability in the Indian Ocean region. With both countries looking to navigate their relationship positively, this reset presents opportunities for deeper engagement and collaboration in the future.