India Pledges $565M to Maldives
India has announced a $565 million financial support package for the Maldives, aiming to enhance defense capabilities and invest in large-scale infrastructure projects.
The commitment was made during Indian Prime Minister Narendra Modi's two-day official visit to the Maldives, his first since securing a third term in office.
The funding includes a new line of credit designed to strengthen Maldivian security forces and address critical infrastructure needs, including healthcare, housing, and education.
The announcement comes at a time of financial strain in the Maldives, with the island nation facing a shortage of foreign currency despite continued growth in its tourism sector.
India also
agreed
to reduce annual repayments on a previous $51 million loan to \$29 million. The two sides held discussions on a potential free trade agreement, reflecting a wider effort to deepen economic and strategic ties.
Modi's visit follows rising concern in New Delhi over the Maldives' closer alignment with China since the election of President Mohamed Muizzu in 2023.
The new administration had previously ordered the withdrawal of a small Indian military contingent operating a rescue aircraft in the archipelago. However, diplomatic relations between the two countries appear to have stabilized in recent months, with both sides emphasizing cooperation in security and trade.
During the visit, Modi inaugurated the new headquarters of the Maldivian Ministry of Defense and launched several Indian-funded infrastructure projects. These included major road developments and a housing initiative to construct 4,000 residential units, part of India's broader investment push in the region.
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