This FTA will help cross-border investment, reduce taxes, and raise trade penetration.
India has reaffirmed its strategic and developmental partnership with the Maldives by extending a new Line of Credit (LoC) worth ₹4,850 crore during Prime Minister Narendra Modi’s ongoing two-day visit to the island nation. The financial assistance aims to fund key infrastructure and development projects across the country.To provide further financial relief, India also signed an amendatory agreement to release the Maldives from the yearly repayment burden associated with previous Indian credit lines. The visit is a reaffirmation of long-term cooperation, economic support, and regional stability.
LoC to Finance Critical Infrastructure Projects The Maldives' vital infrastructure, including roads, utilities, housing, and public services, will be financed with the ₹4,850 crore credit line. The step will advances India's development diplomacy and will increases its influence in the Indian Ocean region. The easing of debt repayment terms under earlier LoCs during a period of global economic uncertainty demonstrates India's strategic sensitivity to its neighbor's balance of payments.
Formal talks for the India-Maldives Free Trade Agreement (IMFTA), a major economic step, have begun between India and the Maldives. This FTA will help cross-border investment, reduce taxes, and raise trade penetration. Driven by a shared objective of market growth and sustainable development, the action is a step toward organized trade cooperation. With India at the center, the IMFTA might enable a more networked regional economy.
A number of Memorandums of Understanding (MoUs) were also inked to deepen engagement in sectors of importance. One of them deals with fisheries and aquaculture, an important sector for the Maldives. Another MoU between India's Institute of Tropical Meteorology and the Maldives Meteorological Services will increase coordination in tracking the weather and responding to climate. A third agreement enhances digital governance solutions, enabling the Maldives to use India's tested e-governance systems — a part of India's increasing soft power in digital infrastructure.
To commemorate 60 years of diplomatic relations, both countries jointly issued a commemorative stamp. The symbolic action pays tribute to a long-standing alliance based on mutual respect, shared history, and strategic trust. It gives a high-stakes diplomatic and business trip a cultural component.
The visit of PM Modi is both symbolic and substantial. India's move to roll back debt, provide new funding, and deepen trade and technology cooperation unmistakably outlines its vision for a stable, integrated, and prosperous Indian Ocean neighbourhood. By so doing, India is not only betting on the Maldives — it is investing in the regional long-term security and economic architecture.
