Prime Minister Narendra Modi concluded a landmark visit to the United Kingdom on Thursday, setting the stage for the next phase of his two-nation tour as he departed for the Maldives. This marks his third visit to the island nation and the first by a head of government during the tenure of Maldivian President Mohamed Muizzu.
The visit is expected to deepen the growing partnership between India and the Maldives, especially under the framework of the India-Maldives Joint Vision for a Comprehensive Economic and Maritime Security Partnership, adopted during President Muizzu’s visit to India in October 2024.
Expanding Economic Ties
India’s economic and trade relationship with the Maldives has transformed in recent years into a multi-dimensional partnership encompassing trade, infrastructure, finance, and technology. The foundation of this relationship was laid in 1981 when both countries signed a bilateral trade agreement under which India assured the export of essential commodities to the Maldives.
In April 2025, India approved the highest-ever quotas for essential goods exports to the Maldives, reaffirming its commitment to the welfare of its maritime neighbour.
Trade between the two nations has grown substantially-from crossing the USD 300 million mark in 2021 to exceeding USD 500 million in 2022. In 2023, bilateral trade stood at USD 548 million. This surge was driven by the launch of a dedicated cargo vessel service in September 2020 and several Lines of Credit (LoC) projects initiated since 2021. Visa-free access for Indian business travellers, granted in February 2022, further encouraged commercial engagement.
India primarily exports pharmaceuticals, engineering goods, cement, agricultural products, and construction materials to the Maldives. In return, scrap metals make up a bulk of Indian imports from the Maldives. Notably, duty-free tuna exports from the Maldives to India were introduced in August 2022, aiming to boost the island nation’s seafood sector.
Strategic Financial Cooperation
The State Bank of India (SBI), operational in the Maldives since 1974, has played a key role in supporting economic infrastructure by financing resort development and marine exports. In November 2022, India extended a USD 100 million financial support package via SBI Malè by subscribing to Maldivian government domestic T-bonds backed by a sovereign guarantee from India. The support was renewed in 2024 with an interest-free extension under a unique government-to-government arrangement.
In response to further budgetary needs, India offered an additional USD 400 million currency swap facility in October 2024. This follows a 2022 agreement signed between the Reserve Bank of India and the Maldives Monetary Authority under the SAARC framework, allowing up to USD 200 million in withdrawals.
Digital and FinTech Partnerships
In August 2024, India and the Maldives signed an agreement enabling the use of India’s Unified Payments Interface (UPI) in the Maldives. This development, facilitated during the visit of India’s External Affairs Minister to Malè, represents a critical step toward digital and financial integration between the two nations.
To further enhance economic cooperation, Maldivian Finance Minister Moosa Zameer visited New Delhi in December 2024 to participate in the Global Economic Policy Forum. He held bilateral meetings with India’s Finance Minister Nirmala Sitharaman and engaged with business leaders from the Confederation of Indian Industry (CII) to explore investment opportunities.
