Modi announces $565-million credit line for debt-plagued Maldives

By Shivam Patel and Uditha Jayasinghe

Indian Prime Minister Narendra Modi announced a $565-million credit line and launched free trade talks with the Maldives on Friday during a visit to the Indian Ocean archipelago, where India competes with China for influence.

Modi's two-day trip is aimed at boosting India's development partnership with the Maldives, and he 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.

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They will work to deepen cooperation on multiple sectors including tourism, healthcare, and housing, Maldives President Mohamed Muizzu said.

"Looking ahead we are fully committed to further strengthen our cooperation with India across a broad range of sectors through exchange of high-level visits," Muizzu added.

Modi is the first foreign leader to visit Muizzu since he took office in 2023, pledging at the time to end the Maldives' "India first" policy, and taking steps to strengthen ties with China.

Muizzu's moves briefly soured relations with New Delhi, before India helped to prevent the $7.5 billion economy from defaulting on its debt as the Maldives struggled to get tourists to its white-sand beaches and luxury resorts.

He has since visited both countries, the Maldives' main bilateral lenders, to secure financial support, as well as signing trade pacts with China and Turkey and initiating talks with India on a trade agreement and an investment treaty.

Modi will also remotely inaugurate an expansion of the international airport on the island of Hanimaadhoo, which India is helping to finance, and attend Saturday's celebration of the Maldives' 60th anniversary of independence from Britain.