(MENAFN) During Prime Minister Narendra Modi’s two-day trip to the Maldives, India and the island nation agreed to enhance their bilateral relationship by signing eight agreements. A notable component of the partnership is a $565 million credit line extended by India to support infrastructure projects prioritized by the Maldivian people, according to Modi.

The two countries also initiated discussions toward a potential free trade agreement, aiming to deepen economic ties. Additionally, they finalized a network-level deal to introduce India’s Unified Payments Interface (UPI) system in the Maldives, aiming to improve financial connectivity between the nations.

This visit marks Modi’s third to the Maldives and is the first by an Indian head of government during President Mohamed Muizzu’s administration. The trip follows a period of diplomatic tension that arose after Muizzu’s 2023 election victory, during which he called for the withdrawal of Indian troops and described India as a “bully.”

Under Muizzu’s leadership, the Maldives sought to shift its foreign policy by strengthening relations with China and diversifying its international partnerships, signaling a move away from its historical reliance on India.

Relations began to improve in October 2024, when India approved a $400 million currency swap and a $100 million Treasury bill rollover to support the Maldivian economy. Modi’s visit further solidifies the efforts to restore and expand cooperation between the two neighbors.

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