India, Maldives reset ties with major deals, defense boost and trade talks

In a landmark shift that signals a diplomatic thaw and strategic reset, India and the Maldives on July 25 unveiled a sweeping set of agreements to deepen bilateral cooperation — from trade and tourism to defense and digital infrastructure.

Prime Minister Narendra Modi, during his two-day state visit to the island nation, announced a ₹4,850-crore (approximately $580 million) line of credit to the Maldives and confirmed the launch of negotiations for a Free Trade Agreement (FTA) — marking a sharp turnaround in ties that had been strained since Maldivian President Mohamed Muizzu took office in late 2023.

Standing alongside Muizzu at a joint press briefing, Modi said, “The Maldives is not just a neighbor but a co-traveller. Our friendship will remain bright and clear, whatever the weather may be.”

The meeting comes just months after Muizzu's “India Out” campaign, which had threatened to derail decades of close partnership. But on Friday, both leaders struck a markedly cooperative tone — signaling not only a diplomatic reset but also a bold push for regional collaboration in the Indian Ocean.

Strategic revival after political chill

The shift is particularly notable given that President Muizzu, widely viewed as pro-China, had demanded the removal of Indian military personnel from the Maldives hours after assuming office in November 2023. His early policies had raised concerns in New Delhi and triggered a period of tense disengagement.

However, Modi’s visit — coupled with a warm welcome at Male airport by Muizzu himself — symbolized a deliberate effort to mend and strengthen the bilateral fabric.

“India is proud to be the most trusted friend of the Maldives,” Modi said, invoking India’s long-standing support in times of crisis — from natural disasters to the COVID-19 pandemic.

Economic and security convergence

In addition to the new credit line and FTA talks, Modi also announced efforts to finalize a bilateral investment treaty, signaling a broader push to integrate the two economies.

Both sides signed four MoUs and three agreements covering digital innovation, defence, fisheries, and aquaculture. India handed over 3,300 housing units in Hulhumale, inaugurated road and drainage infrastructure in Addu, and committed 72 heavy defense vehicles to the Maldivian military.

“We discussed strengthening regional maritime security through the Colombo Security Conclave,” Modi said, reaffirming India’s role in ensuring peace and stability in the Indian Ocean region.

Tourism, flights, and environmental ties

Highlighting India’s status as a top tourism source market, Muizzu said both countries are exploring direct flights to bolster connectivity. “We discussed expanding this vital sector and commencing direct flights to strengthen tourism cooperation,” he said.

Environmental cooperation also featured prominently, with plans for joint efforts in biodiversity conservation, renewable energy, and water sanitation.

Symbolic gestures and diplomatic milestones

In a show of growing warmth, Modi and Muizzu released a commemorative stamp to mark 60 years of formal diplomatic ties. On July 26, Modi will attend the Maldives’ 60th Independence Day celebrations as the guest of honour — a move underscoring India’s renewed embrace of its neighbour.

“Be it essential commodities or economic aid post-Covid, India has always stood by Maldives as a First Responder,” Modi said.

With both sides now moving swiftly on economic and strategic fronts, the message is clear: India and Maldives are scripting a new chapter — one anchored in shared interests, mutual respect, and a recalibrated vision for regional cooperation.