India Extends ₹4,850 crore Line of Credit to Maldives: Bilateral Collaboration Strategies penned during PM Modi’s Visit
The two nations also signed cooperative agreements on fisheries, pharmacopoeia and digital public infrastructure during PM Modi’s state visit.
The two nations also signed cooperative agreements on fisheries, pharmacopoeia and digital public infrastructure during PM Modi’s state visit.India extended a ₹4,850 crore Line of Credit to the Maldives during Prime Minister NarendraModi’s two-day state visit to the island nation.
Tensions were earlier rife between India and the Maldives following derogatory remarks made by ministers of the Maldivian cabinet towards Prime Minister Modi and India as a whole. The state visit signals a realignment in bilateral relations and renewal of trust between the two nations.
The state visit also saw the implementation of a series of agreements across digital, trade, and infrastructure sectors, underscoring India’s long-term commitment to Maldives' economic recovery and regional stability.
The rupee-denominated line of credit is the first of its kind offered by India to the Maldives and is expected to be a major event in future bilateral trade using the Indian Rupee. According to Foreign Secretary Vikram Misri, “the LoC represents a continuation of the tradition of assistance to the development needs of the Maldives”.
The two governments also signed an amendatory agreement restructuring a prior dollar-based line of credit, also reducing Maldives’ annual debt repayment burden by nearly 40% - from $51 million to $29 million.
The line of credit agreement and its accompanying debt relief pact were among the key highlights of Prime Minister Modi’s engagements with Maldives’ President Mohamed Muizzu.
The state visit also witnessed the formal launch of Free Trade Agreement negotiations and a renewed commitment to fast-track a long-pending bilateral investment treaty.
UPI in Maldives
Another landmark agreement signed during the visit was the network-to-network pact between India’s National Payments Corporation (NPCI) and the Maldives Monetary Authority, setting the stage for India’s Unified Payments Interface (UPI) to become operational in the Maldives.
Once implemented, this is expected to significantly ease tourism and medical travel between the two countries which share high volumes of person-to-person exchanges.
Speaking after the delegation-level talks, Prime Minister Modi reaffirmed India’s place as Maldives’ “most trusted friend,” adding that “for us, it is always friendship first.” The sentiment was echoed by Maldivian officials who received Modi at Velana International Airport with a ceremonial guard of honour and a special cultural performance.
Also introduced during the visit were commemorative stamps to mark the 60th anniversary of diplomatic ties, inauguration of infrastructure projects including 3,300 social housing units, a Defence Ministry building and the handover of equipment to Maldivian security forces.
Prime Minister Modi is also slated to attend Maldives’ Independence Day celebrations today (26 July 2025) as the Guest of Honour, cementing a new phase of economic and maritime cooperation.
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