New Delhi has announced a $565 million credit line to the debt-ridden island nation

India and the Maldives have agreed to boost bilateral ties during Prime Minister Narendra Modi's two-day visit to the island nation, with the South Asian neighbors signing eight agreements on Friday.

Among the key agreements is a $565 million credit line from New Delhi to the debt-ridden island nation.

"This will be used for projects linked to infrastructure development in line with the priorities of the Maldivian people," Modi said.

The countries have also launched talks for a free trade agreement.

In addition, a network-level agreement was concluded to bring India's flagship real-time payment system Unified Payments Interface to aid financial connectivity in the Maldives.

The visit is Modi's third to the island nation and the first by a head of government during Maldivian President Mohamed Muizzu's tenure. It follows a diplomatic row between the two nations after Muizzu won the 2023 election and demanded the withdrawal of Indian troops from the Maldives, calling India a "bully."

After Muizzu assumed office in September 2023, the Maldives pursued a new policy direction, seeking to bolster ties with China and diversify its relationships, which was perceived as a strategic shift away from its traditional dependence on India.

The relationship began to mend in October 2024, when India approved a $400 million currency swap agreement and a $100 million Treasury bill rollover to aid its neighbor.

During his two-day visit to Male, Modi will attend the 60th anniversary celebrations of Maldivian independence. The countries will also commemorate 60 years of diplomatic relations.

"India is also proud to be the most trusted friend of the Maldives," Modi said on Friday. "Be it a disaster or a pandemic, India has always stood by as the 'First Responder.'"'

(RT.com)