The recent meeting between Prime Minister Narendra Modi and Maldives President Mohamed Muizzu marked a significant step in advancing the developmental partnership between India and the Maldives. The joint initiatives, such as improving ports, airports, housing, and hospitals, are crucial for addressing the Maldives’ infrastructure challenges and boosting economic growth. Notably, projects like the Greater Male Connectivity Project (GMCP) and the commercial port at Thilafushi aim to ease congestion in Male and enhance regional trade.
These efforts are essential for the Maldives, a small island nation highly dependent on tourism and imports, to diversify its economy and address its growing housing and infrastructure needs. The projects are set to benefit the general population by improving living standards, while also offering opportunities for increased tourism and trade—two critical pillars of the Maldivian economy.
A primary focus is on infrastructure development, which includes the construction of ports, airports, housing, and roads. For instance, the flagship Greater Male Connectivity Project (GMCP), aimed at enhancing inter-island transport, will bridge the capital city of Male with nearby islands. This will facilitate easier movement of goods and people, directly benefiting the economy by decongesting the Male port and providing enhanced cargo capacity. Similarly, the development of Thilafushi Island’s commercial port will improve the Maldives’ logistics and supply chain, bolstering trade.
Social housing is another priority. India’s assistance in constructing 4,000 housing units in Hulhumalé and water and sanitation projects across 28 islands addresses the Maldives’ critical housing and basic infrastructure challenges. These projects will improve living conditions for thousands of residents, while also creating jobs in construction and related sectors.
Economic initiatives include the development of Hanimaadhoo and Gan airports, supported by India, to boost connectivity and tourism, a vital sector for the Maldives’ economy. Furthermore, both nations are exploring a Free Trade Agreement to deepen trade ties, with plans to settle transactions in local currencies to reduce dependence on foreign currencies. This is particularly important given the Maldives’ current economic challenges.
India’s support extends to renewable energy, with joint efforts to implement solar power projects in the Maldives, aligning with the country’s goal of achieving sustainable development. Moreover, India has committed to providing financial aid, including a USD 400 million currency swap agreement, which offers the Maldives financial stability during this period of economic stress
Beyond infrastructure, India is playing a pivotal role in ensuring economic stability in the Maldives, including rolling over $100 million in Treasury Bills and providing budgetary support to ease foreign exchange pressures. This financial assistance is vital for stabilising the Maldivian economy amid rising global challenges.
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India and the Maldives have maintained a long-standing partnership, with India serving as a “first responder” in times of crisis, such as during the 2014 water crisis and the COVID-19 pandemic. The two countries have built upon their close ties through initiatives like the Comprehensive Economic and Maritime Security Partnership, focusing on defence cooperation and regional stability. As both nations approach the 60th anniversary of their diplomatic relationship in 2025, the collaboration continues to strengthen.