In a major diplomatic move, India has extended a ₹4,850 crore (USD 565 million)India maldives Line of Credit , announced during PM Narendra Modi’s landmark visit to the island nation. This move is seen as part of India’s ‘Neighbourhood First’ policy and a clear signal of its commitment to fostering regional partnerships amid rising geopolitical competition in the Indian Ocean. With this funding, India is not only boosting Maldives’ infrastructure and economy but also reaffirming its position as a trusted development partner.
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‘Friendship First’: PM Modi Ushers in India‑Maldives Reset at Strategic State Visit
India Maldives line of credit Means?
Development Backing from India
The Line of Credit (LoC) will support critical infrastructure and community development across Maldives. This includes:
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Construction of social housing units in Hulhumalé
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Development of roads and drainage systems in Addu City
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Implementation of six High-Impact Community Development Projects (HICDPs)
These projects not only improve local living standards but also demonstrate India’s commitment as a reliable regional development partner.
💸 Debt Relief for Maldives
India also signed an amendment to the credit agreement, reducing the Maldives’ annual debt repayment by nearly 40%, easing financial strain on the island nation and enabling greater fiscal flexibility.
India Maldives line of credit: Free Trade Agreement (FTA)
For the first time, India and Maldives have agreed to formally launch negotiations on a Free Trade Agreement (FTA). This move opens the door to:
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Duty-free access to goods and services
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Boosted cross-border investments
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Stronger economic integration in South Asia
🔐 Strategic and Maritime Alignment
India’s renewed engagement with the Maldives is seen as a strategic counterbalance to China’s growing presence in the Indian Ocean. By offering development support rather than debt dependency, India reinforces its role as a trusted friend and strategic partner.
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‘Friendship First’: PM Modi Ushers in India‑Maldives Reset at Strategic State Visit
Key Projects & Deliverables Announced
During Prime Minister Narendra Modi’s visit to the Maldives, several major India-funded projects were officially handed over, reinforcing India’s role as a key development partner in the region. Among the most notable was the formal inauguration of 3,300 social housing units in Hulhumalé, a project aimed at improving urban infrastructure and addressing the housing needs of Maldivian citizens.
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🏘️ 3,300 Housing Units formally inaugurated in Hulhumalé
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🚚 Delivery of 72 vehicles and key equipment for Maldives government institutions
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📡 Agreements on meteorology, digital governance, fisheries, and pharmaceuticals
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💳 Introduction of India’s UPI (Unified Payments Interface) system in Maldives
🇮🇳 India’s Role: A Trusted Partner, Not a Predatory Lender Unlike other lenders offering high-interest loans, India’s approach is people-centric. Through concessional funding and real development, India helps countries like the Maldives grow without falling into debt traps. This positions India as a sustainable, transparent, and responsible regional power
PM Modi’s visit to Maldives and the announcement of the ₹4,850 crore Line of Credit marks more than a diplomatic gesture—it’s a strategic reset that promises long-term benefits for both nations. As India continues to champion regional cooperation without coercion, the Maldives stands as a frontline example of how diplomacy, development, and trust can transform a partnership.