India-Maldives diplomatic relations in 2025 are seeing a drastic change, Prime Minister Narendra Modi arrives in the Maldives on July 25 after finishing a historic visit to the United Kingdom. His trip is timed with the island nation celebrating its 60th anniversary of independence and six decades of diplomatic relations with India.
The visit is an ambitious effort to restore frayed ties under President Mohamed Muizzu, who assumed office on an “India Out” plank. India now wants to introduce UPI services in Maldives, investigate a new Free Trade Agreement, and deepen defense and economic ties in the Indian Ocean Region.
India and Maldives Reconnect Through Diplomacy and Celebration
Modi will remain in the Maldives until July 26; he will be the guest of honor at the nation’s 60th Independence Day celebrations. He is also scheduled to open infrastructure projects this is his third visit to the Maldives after 2014. India was one of the earliest to acknowledge the Maldives’ independence in 1965 and establish diplomatic relations, Modi will hold talks with President Muizzu and other top leaders this is the first state visit hosted by Muizzu since he took office in late 2023.
UPI Launch, FTA Talks, and Bolstering Trade Links
India is planning to introduce its UPI payment system in the Maldives the two nations are likely to start negotiations for a 2025 Free Trade Agreement. India and Maldives had signed a trade agreement in 1981; bilateral trade was worth $548 million in 2023—nearly double the 2020 level of $245 million. India exports pharma products, radars, cement, rice, spices, poultry, and fruits and imports scrap metals. India’s desire for a new FTA comes on the heels of Male’s FTA with China, effective from January 1.
Strengthening Defense, Fighting Drugs, and Safeguarding the Sea
Modi and Muizzu will also discuss their 2024 Comprehensive Economic and Maritime Security Partnership this framework is what directs their relationship today. The issue of drug trafficking and maritime security in the Indian Ocean and Arabian Sea will be discussed drug abuse has been viewed by the Maldives as a national crisis. The two countries are likely to enhance defense cooperation, intelligence sharing, and surveillance coordination a building for the Maldives National Defense Force could also be announced.
A Step Forward in Mending Frayed Relations
Modi’s trip aims to rebuild relations that suffered under Muizzu’s early tenure the “India Out” campaign, demand for Indian troop withdrawal, and derogatory remarks by ministers in January 2024 hurt diplomatic ties. Tourism from India dropped as backlash grew yet, India stayed patient. Modi was the first leader to congratulate Muizzu on his election win, Muizzu visited India later in 2024 both sides began efforts to restore trust and deepen collaboration.
Economic Assistance and Lifelines During Crisis
India has provided Maldives with financial lifelines time and again the initial two currency swaps worth $400 million are almost depleted. Both nations are likely to invoke a new ₹30-billion swap line, India rolled over in May a $50 million loan after Fitch cut Maldives’ credit rating. India is also constructing the Greater Malé Connectivity Project and financing other important infrastructure via concessional credit and buyer’s credit.
Mutual Trust, Shared Waters, and Future Stability
Foreign Secretary Vikram Misri highlighted how India views Maldives as a core partner in the ‘Neighborhood First’ and MAHASAGAR vision. He stressed the consistent efforts to maintain clarity, trust, and mutual understanding. The Federation of Indian Export Organizations (FIEO) said Modi’s twin visits to the UK and Maldives will boost regional stability and Indian exports. Former President Mohamed Nasheed underlined Maldives’ strategic importance, reinforcing how vital India’s engagement remains.
