Modi's Maldives Reset: UPI Push, Rs 30-billion swap line chart India's new diplomatic shift

India will eye a strategic diplomatic reset with Maldives as Prime Minister Narendra Modi visits the archipelagic nation later this week. Just before his departure, PM Modi spoke about India’s ‘Neighbourhood First Policy.’

“I will join the celebrations marking the 60th anniversary of the Independence of Maldives. This year also marks the 60th anniversary of the establishment of diplomatic relations between our two countries. I look forward to my meetings with President Muizzu and other political leadership, to advance our joint vision of a Comprehensive Economic and Maritime Security Partnership, and to strengthen our cooperation for peace, prosperity and stability in the Indian Ocean Region,” PM Modi said in his pre-departure statement.

As per a CNN-News18 report, India may also launch UPI services in Maldives. Other key initiatives towards improving the bilateral ties include Rs 30-billion swap line.

This will be PM Modi’s first visit to Maldives after the regime change. This marks a shift in a relationship that began on a tense note. Earlier, President Muizzu had demanded the withdrawal of Indian military personnel operating aviation platforms — including two helicopters and an aircraft — prompting their replacement with technical staff. During his visit to India in October last year, both sides took steps to ease tensions and rebuild trust. Prime Minister Modi’s upcoming visit is expected to further advance that reconciliation.

On Tuesday, addressing media in New Delhi, Foreign Secretary Vikram Misri said, ““There will always be events that impact or try to intrude on the relationship. But this is testimony to the kind of attention paid to the relationship, including at the highest levels. We’ve continued to work at it, and the results are visible. We’ve also had close discussions with our partners in the Maldives to provide clarity and assurances about our bilateral intentions, and the results are evident."

The discussion on the free trade agreement between the two countries will also be part of agenda for PM Modi. ““Our recent assistance has improved the foreign exchange position of the Maldives, which has been cited by international financial organisations, including the IMF, as a positive factor that has helped the Maldives avoid difficult outcomes. My understanding is that the $400 million swap line has been almost completely utilised, and now the 30 billion rupee Indian swap line might also be drawn upon," Misri further said.

Prior to the Maldives trip, PM Modi will also visit the United Kingdom. India and the UK will also ink the critical FTA in London tomorrow.