India, Maldives Sign $400 Million Currency Swap Deal, Begin Free Trade Agreement Talks

New Delhi: In a significant move to bolster bilateral relations, India and the Maldives signed a currency swap agreement worth $400 million on Monday. This agreement aims to assist the Maldives in addressing its foreign exchange reserve challenges.

During a four-day state visit, Maldivian President Mohamed Muizzu met with Prime Minister Narendra Modi at Hyderabad House, where they discussed various cooperative initiatives. They also launched the Rupay card in the Maldives and inaugurated the newly developed runway at Hanimadhoo International Airport.

Prime Minister Modi announced that India is committed to expediting the Greater Male Connectivity Project and will assist in developing a new commercial port in Thilafushi. “Today, we have inaugurated the redeveloped Hanimaadhoo Airport. We have also initiated discussions on a Free Trade Agreement to further enhance our economic ties,” Modi stated.

India also handed over 700 social housing units to the Maldives, funded through the EXIM Bank’s buyer’s credit facilities. Modi emphasised the strategic importance of the Maldives in India’s neighbourhood policy and its SAGAR (Security and Growth for All in the Region) vision. “India has always fulfilled its responsibilities as a neighbour, and today we are strengthening our economic and maritime security partnership,” he added.

Prior to the discussions, President Droupadi Murmu welcomed Muizzu with a ceremonial reception at Rashtrapati Bhawan, where he received a tri-services guard of honour. Muizzu paid homage to Mahatma Gandhi at Rajghat following the ceremony.

Relations between the two countries had soured since Muizzu’s election last year, which was characterised by a pro-China stance and the ‘India Out’ campaign.

However, Muizzu has moderated his position, dismissing critical ministers and seeking to mend ties amid the Maldives’ economic difficulties. As part of this effort, India has agreed to extend a vital budgetary support package, rolling over a $50 million Treasury Bill for another year.