UPI, FTA, Rs 30-Billion Swap Line: India’s Big Plans For PM Modi’s Maldives Trip As Ties Reset

Last Updated:July 23, 2025, 10:52 IST

Describing the turnaround in ties, foreign secretary Vikram Misri on Tuesday termed it 'a question of working hard at a relationship'

Muizzu's bilateral visit last October resulted in a meeting with Prime Minister Narendra Modi, which was seen as the two nations considering the row as history. File pic/Reuters

“It’s a question of working hard at a relationship," said foreign secretary Vikram Misri on Tuesday, describing the turnaround in relations with the Maldives since 2024, ahead of Prime Minister Narendra Modi’s two-day trip to the archipelagic country this week.

New Delhi outlined several initiatives for the PM’s trip, including an attempt to introduce UPI in the Maldives to boost tourism from India, a Rs 30-billion Indian swap line in progress, a free trade agreement under discussion, and a possible announcement regarding the MNDF (Maldives Defence Force) building. This marks a significant change from 2024, when diplomatic relations had hit rock bottom.

“There will always be events that impact or try to intrude on the relationship. But this is testimony to the kind of attention paid to the relationship, including at the highest levels. We’ve continued to work at it, and the results are visible. We’ve also had close discussions with our partners in the Maldives to provide clarity and assurances about our bilateral intentions, and the results are evident," Misri said.

The Maldives has been facing a stressful financial environment, and India is assisting it. “Our recent assistance has improved the foreign exchange position of the Maldives, which has been cited by international financial organisations, including the IMF, as a positive factor that has helped the Maldives avoid difficult outcomes. My understanding is that the $400 million swap line has been almost completely utilised, and now the 30 billion rupee Indian swap line might also be drawn upon," Misri added.

The foreign secretary mentioned that significant work has been done on the MNDF building project, and an announcement could be made soon.

The Prime Minister’s visit to the Maldives will be on July 25-26 at the invitation of President Mohamed Muizzu. Muizzu was on a state visit to India in October 2024 and had previously attended the swearing-in ceremony of the new Modi government. PM Modi will hold bilateral meetings with the Maldives President and inaugurate some infrastructure projects.

The Prime Minister will be the guest of honour at the celebrations commemorating the 60th anniversary of the Maldives’ independence on July 26, 2025. Coincidentally, 2025 also marks the 60th anniversary of India-Maldives diplomatic relations. This is Modi’s first state visit hosted by President Muizzu since he took office in November 2023. The PM has visited the Maldives in 2018 and 2019.

The Maldives is a crucial partner in India’s Neighbourhood First policy and MAHASAGAR vision. Misri highlighted how India has always responded promptly to the Maldives’ needs in times of crisis, whether natural or manmade. Last year, Modi and Muizzu adopted a joint vision for an India-Maldives comprehensive economic and maritime security partnership. “This joint vision guides our relations, and this year, in just the first six months, we’ve seen nearly half a dozen ministerial-level visits from the Maldives," Misri said.

India is one of the Maldives’ largest trading partners, with bilateral trade nearing $500 million. “Both countries are negotiating a free trade agreement and an investment treaty. New areas of cooperation, including renewable energy and fisheries, are also being explored," Misri said.

The flagship project currently underway is the Greater Malé Connectivity Project, which could be a game changer for infrastructure in the Greater Malé region, connecting four islands. “Other ongoing projects include roads, airports, and fisheries processing units. We are also alleviating pressure by helping with social housing based on the Maldives’ needs and priorities," said the foreign secretary.

Twin currency swap arrangements were made when President Muizzu visited India in 2024, amounting to 400 million US dollars and 30 billion Indian rupees. “Additionally, the State Bank of India has continued to re-subscribe to Maldives treasury bills," Misri said.

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