Indian Prime Minister Narendra Modi has announced a $565m credit line and launched free trade talks with the Maldives during a visit to the Indian Ocean archipelago.
Modi’s two-day trip, which began on Friday, is aimed at boosting India’s development partnership with the Maldives, where India competes with China for influence.
The Indian prime minister said the credit line was central to that goal.
“This will be used for projects linked to infrastructure development in line with the priorities of the Maldivian people,” he said, adding that the two countries would also finalise a bilateral investment agreement.
Modi, who is making his first official visit to the Maldives since winning a third term last year, also stressed that India will remain the “first responder” for the country, which has a population of approximately 525,000 people.
“India will continue to support the Maldives in strengthening its defence capabilities,” he said.
“Peace, stability, and prosperity in the Indian Ocean region are our shared goals.”
India had been concerned that the Maldives was drifting towards the orbit of its rival China following the 2023 election of President Mohamed Muizzu on an anti-India platform.
Since coming to power, Muizzu broke tradition by choosing to travel to China before visiting India.
He also secured the withdrawal of a small contingent of Indian military personnel, who operated two search-and-rescue helicopters and a fixed-wing reconnaissance aircraft based in the archipelago.
Muizzu’s moves briefly soured relations with New Delhi, before India helped to prevent the $7.5bn economy from defaulting on its debt as the Maldives struggled to get tourists to its white-sand beaches and luxury resorts.
Muizzu has since visited India and toned down his anti-India rhetoric. He also met Modi twice last year in New Delhi, with both leaders pledging to begin a “new chapter” in bilateral ties.
On Friday, Muizzu said the credit line from India would be used to strengthen the Maldives’ security forces, as well as improve healthcare, housing, and education.
“India’s continued assistance to the Maldives through the export of essential commodities is a key facet of our bilateral cooperation,” he said.
Modi is due to leave the archipelago on Saturday after attending the country’s 60th Independence Day celebrations in the capital, Male.
The Indian prime minister will also remotely inaugurate an expansion of the international airport on the island of Hanimaadhoo, which India is helping to finance.
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