Modi pledges $565m to debt-ridden Maldives during two-day visit
Mr Modi's visit comes as the Maldives is set to celebrate its 60th year of independence amid renewed vigour in diplomatic relations between the two countries.
The Indian prime minister's visit also marks the further easing of diplomatic tensions between the two nations that followed the election of pro- China Muizzu in 2023.
Mr Modi's two-day visit is crucial to India's ambition to control the seas and shipping routes of the Indian Ocean in a race with its regional rival China.
Regional powers India and China compete for influence in the archipelago nation, which is strategically located in the Indian Ocean.
On Friday, Mr Modi witnessed the exchange of agreements to cooperate in sectors such as fisheries, health, tourism and digital development. He also formally handed dozens of heavy vehicles to the Maldives' defense forces.
'India is Maldives' closest neighbour. Maldives holds an important place in both India's neighborhood-first policy and ocean vision," the Indian prime minister said. 'India is also proud to be Maldives' most trusted friend.'
The line of credit will be used for 'infrastructure and development projects in line with the priorities of the people of the Maldives,' he said.
"India will continue to support Maldives in developing its defence capabilities. Peace, stability and prosperity in the Indian Ocean region is our common goal," Mr Modi added.
During Muizzu's visit to India last October, India announced financial support to the cash-strapped Maldives in the form of a $100-million treasury bills rollover and the countries signed a $400-million currency swap agreement.
Tensions between India and the Maldives grew since Mr Muizzu, who favoured closer ties with China, was elected in 2023 after defeating India-friendly incumbent Ibrahim Mohamed Solih.
Leading up to the election, Mr Muizzu had promised to expel Indian soldiers deployed in the Maldives to help with humanitarian assistance. Last year New Delhi replaced dozens of its soldiers in the Maldives with civilian experts.
Measure by Mr Modi to promote tourism in India's Lakshadweep archipelago, off the southwestern coast of the Indian mainland, also sparked anger from Maldivians, who saw it as a move to lure Indian tourists away from their country. Indian celebrities then called for a tourism boycott to the Maldives.
The dispute deepened when Mr Muizzu visited China ahead of India in January last year, a move seen by New Delhi as a snub.
On his return, Mr Muizzu spelled out plans to rid his tiny nation of dependence on India for health facilities, medicines and import of staples.
Relations started to improve after Mr Muizzu attended Mr Modi's swearing-in ceremony for a third five-year term. The Maldives' president has toned down his anti-Indian rhetoric, and official contacts with New Delhi have intensified as concerns grew about the archipelago nation's economy.
India has long been a critical provider of development assistance to the Maldives. Meanwhile, the Maldives joined China's Belt and Road Initiative in 2013 to build ports and highways and expand trade as well as China's influence across Asia, Africa, and Europe.
Mr Modi will attend the Maldives' 60th independence anniversary from being a British protectorate on Saturday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
27 minutes ago
- Reuters
India's Adani Ports reports quarterly profit rise on cargo growth
Aug 5 (Reuters) - India's Adani Ports and Special Economic Zone ( opens new tab reported a quarterly profit rise on Tuesday, boosted by growing cargo volumes. India's biggest private port operator is seen as a proxy for long-term infrastructure prospects in the world's fastest growing major economy. Its consolidated net profit rose 6.5% on-year to 33.15 billion rupees ($377.6 million) for the April-June quarter. The company said Executive Chairman Gautam Adani will now be its non-executive chairman. Consequently, the Indian billionaire would cease to be key managerial personnel of the company, it said. Cargo volumes for the ports operator grew, opens new tab 11% on-year in the quarter, faster than 8% in the preceeding quarter and 7.5% year-ago, opens new tab. That lifted its revenues by 31% to 91.26 billion rupees. Adani Ports maintained its fiscal year 2026 forecast of cargo volumes at 505 million metric tonnes to 515 million metric tonnes. ($1 = 87.7890 Indian rupees)
Fashion United
an hour ago
- Fashion United
India-UK FTA: Balancing trade dynamics amid US tariff concerns
The highly anticipated Free Trade Agreement (FTA) between the UK and India has been officially signed, promising to significantly reshape the trade landscape for both nations. The agreement, signed in the presence of Indian Prime Minister Narendra Modi and his British counterpart Keir Starmer, is expected to increase annual trade by 34.53 billion dollars and aims to double bilateral trade to 120 billion dollars by 2030. A key feature of the pact is the elimination of import duties on major Indian export goods, including apparel, leather goods, and footwear. A game-changer for India's apparel sector The removal of tariffs, which typically range from 8-12 percent, is set to make Indian apparel and home textiles more competitive and affordable in the UK. This will particularly benefit exporters in major hubs like Ludhiana, Surat, and Tirupur. The Apparel Export Promotion Council (AEPC) vice chairman, A. Sakthivel, hailed the agreement as a historic achievement, projecting that India's ready-made garment (RMG) exports to the UK will more than double from the current 1.45 billion dollars to 3.25 billion dollars in the near future. Knitwear exports alone are expected to surge from 0.8 billion dollars to nearly 2 billion dollars, accounting for roughly 70 percent of total RMG exports to the UK. Rajeev Gupta, joint managing director of RSWM Ltd, echoed this sentiment, stating that the FTA is a "game-changing shift" that removes the 9-12 percent tariff disadvantage, allowing Indian exporters to compete directly with zero-duty countries like Bangladesh and Pakistan. He added that the agreement reflects a growing trust in India's manufacturing capabilities and will lay the groundwork for export growth, innovation, and greater integration with global fashion supply chains. The FTA also includes provisions for digital, paperless trade and the mutual acceptance of safety and hygiene standards, which will streamline trade processes and guarantee product quality. Balancing global trade dynamics The signing of the India-UK FTA comes at a crucial time, as New Delhi navigates complex trade relations with other major partners. The agreement stands in stark contrast to the current dynamic with the U.S., where a recent tariff threat has created a layer of uncertainty for Indian exporters. President Donald Trump has been vocal about India's high tariffs, suggesting a 25 percent tariff on Indian goods and an "unspecified penalty" for its relationship with Russia. Neil Saunders, an analyst at GlobalData, and Dr. Sheng Lu of the University of Delaware, have both expressed concern that this U.S. tariff threat could make India less competitive as a manufacturing hub and potentially hinder new commitments from U.S. fashion companies. However, the India-UK FTA provides a counterbalance to this uncertainty. As Rajeev Gupta of RSWM Ltd. commented, "The 25% tariff by the U.S. comes as a temporary setback... Our Free Trade Agreement with the UK opens up varied opportunities and is a welcoming move for the industry." New opportunities and challenges for both sides The FTA promises benefits for both Indian and British consumers and businesses. For Indian buyers, the agreement means lower prices on British footwear brands like Clarks and Dr. Martens, and on high-end fashion houses such as Burberry and Ted Baker. This increased affordability is expected to drive new fashion trends and expand the market for British goods in India. For Indian brands, the FTA "unlocks a powerful runway... to export both product and purpose," said Rakesh Bali, senior vice president and head of marketing at Reliance Industries Limited. He highlighted the opportunity for Indian fashion and lifestyle brands to launch in the UK with a strong sustainability story, noting that this "can catalyse business, product and knowledge exchange" between the two nations. Bali also pointed out a key challenge for Indian exporters, stating that "the key challenge will be aligning with the UK's high expectations around ESG, circularity, and transparency." He stressed that while cost and capacity are strengths, "long-term success will require embedding sustainability into brand and product DNA." For UK businesses entering the Indian market, Bali said they will need to adapt to regional consumer nuances and evolving sustainability preferences. He explained that "Indian consumers, especially Gen Z and Millennials, are increasingly drawn to eco-conscious, craft-based brands with a strong cultural storytelling." The India-UK FTA is seen as a comprehensive economic enabler that will not only boost trade in key sectors but also foster greater market access, regulatory cooperation, and job creation in both nations.
The Independent
3 hours ago
- The Independent
India calls Trump's tariff threat over Russian oil purchases ‘unjustified'
India condemned as 'unjustified' a threat by Donald Trump to significantly raise tariffs on the South Asian country's exports to the US, escalating tensions over New Delhi 's purchase of Russian oil. Mr Trump on Monday accused India of profiting from discounted Russian crude while disregarding the ongoing conflict in Ukraine. "India is not only buying massive amounts of Russian oil, they are then, for much of the oil purchased, selling it on the open market for big profits," the US president said on social media. 'They don't care how many people in Ukraine are being killed by the Russian war machine. Because of this, I will be substantially raising the tariff paid by India to the USA." India's foreign ministry responded swiftly. 'The targeting of India is unjustified and unreasonable," spokesperson Randhir Jaiswal said, adding that New Delhi would "take all necessary measures to safeguard its national interests and economic security'. Mr Jaiswal also highlighted the ongoing energy and industrial trade between Russia and the West. He pointed out that the EU had goods trade with Russia of £57.38 bn in 2024 in addition to £14.62 bn in services trade the previous year. The US, meanwhile, continued to import Russian uranium for its nuclear sector and palladium for electric vehicles. 'It is revealing that the very nations criticising India are themselves indulging in trade with Russia,' he said. 'Unlike our case, such trade is not even a vital national compulsion for them.' The escalating rhetoric marks a new low in a once-warm relationship between Mr Trump and Indian leader Narendra Modi, characterised by public camaraderie and joint rallies. Growing friction over trade, energy policy, and Mr Trump's overtures to rival Pakistan have strained US ties with New Delhi, and pressure from Western capitals to reduce its reliance on Russian oil is only piling up the pressure. Indian officials argued that the pivot to Russian oil was a market-driven necessity after traditional supplies were redirected to Europe following Western sanctions. India imported an average of 1.75 million barrels a day of Russian oil from January to June 2025, making it the largest buyer of seaborne Russian crude, up one per cent from a year ago, according to data analysed by Reuters. In recent months, however, public sector refiners in India, facing pressure and uncertainty, have started reducing Russian oil purchases. Imports in July fell to 1.6 million barrels per day, a 24 per cent decline from June and a 23.5 per cent fall year-on-year, according to tracking data from Kpler. Indian officials though maintained that there had been no formal policy change. Indian Oil Corp, the country's largest refiner, recently purchased 7 million barrels from the US, Canada, and Middle Eastern suppliers, Reuters reported, quoting unnamed trade sources. Mr Trump earlier imposed a 25 per cent levy on Indian imports, further unsettling bilateral relations. The US is India's largest trading partner. Indian exports to the US totalled £68.17bn in 2024 with a trade surplus of £35.88bn. India is not alone in importing Russian crude. According to think tank GTRI, China imported £49.45bn worth of Russian oil in 2024, compared to India's £39bn. Yet, Mr Trump has so far refrained from criticising Beijing. Eric Garcetti, former US ambassador to New Delhi, previously said that Washington supported Indian crude purchases from Russia to help stabilise energy markets. Indian energy minister Hardeep Singh Puri similarly defended the imports as both essential and sanctioned within the price cap framework. 'India helped stabilise global energy prices,' Mr Puri told CNBC. 'We were advised, including by our friends in the United States, to please buy Russian oil – but within the price cap.'
