Strategic reset, trade talks, digital push with UPI: What's driving PM Modi's high-stakes Maldives visit

PM Modi Maldives visit (Image: X)

Prime Minister Narendra Modi arrived in the Maldives at the invitation of President Mohamed Muizzu to attend the 60th National Day celebrations as the chief guest during his two-day state visit, following his trip to the UK. During Modi’s UK visit, India and the UK signed a landmark free trade agreement.

This marks Modi’s first trip to the Maldives since President Mohamed Muizzu took office in November 2023, and his third official visit to the country as prime minister. It is also the first visit by a foreign head of government hosted by President Muizzu.

The visit comes amid efforts to recalibrate bilateral relations following a period of diplomatic tension and coincides.

Let’s take a closer look at the agenda of PM's visit

India is set to launch its UPI services in the Maldives and begin discussions on a proposed Free Trade Agreement (FTA) in 2025, according to Foreign Secretary Vikram Misri.

As reported by CNN-News18, the introduction of UPI is among several key initiatives aimed at strengthening bilateral ties, alongside the ₹30-billion rupee swap line.

Bilateral trade, valued at around $548 million in 2023, has more than doubled since 2020 when it stood at roughly $245 million. Key exports from India include pharmaceuticals, radars, cement, rice, spices, fruits, vegetables, and poultry, while imports from the Maldives are primarily scrap metals.

The two nations will review progress on the “Comprehensive Economic and Maritime Security Partnership”, adopted during the 2024 visit of the Maldivian President to India, which now serves as the guiding framework for bilateral relations.

Discussions will also focus on strengthening defence and maritime cooperation - including intelligence sharing - and combating drug trafficking in the Indian Ocean and Arabian Sea, as underscored by Maldivian President Muizzu, who called drug control a national priority.

A number of MoUs on infrastructure and capacity building are expected to be signed to further deepen economic and strategic ties.

Modi’s visit, aligned with the 60th anniversary of Maldives’ independence and the establishment of India‑Maldives diplomatic relations, underlines India’s commitment to its ‘Neighbourhood First’ policy and Vision MAHASAGAR for regional cooperation and security in the Indian Ocean.

India-Maldives ties recover

Muizzu, known for his pro-China stance, came to power on an “India Out” campaign and had called for the withdrawal of Indian military personnel from the Maldives. Despite this, PM Modi was the first world leader to congratulate Muizzu on his victory.

In January 2024, three deputy ministers in the Maldivian cabinet made derogatory remarks about Modi, leading to a boycott campaign in India that severely impacted Maldives’ tourism industry.

Though tourism remains a key pillar of the Maldivian economy, relations between the two countries have gradually improved, with Muizzu visiting India for a state visit late last year.

However, the situation improved following India’s recent assistance. It is understood that the $400 million swap line has been nearly fully utilized, and the 30 billion rupee Indian swap line may also be tapped. According to Foreign Secretary Vikram Misri, international financial organizations, including the IMF, have cited this support as a positive factor helping the Maldives avoid difficult outcomes.