India and Maldives are currently engaged in active discussions to negotiate a Free Trade Agreement (FTA) and an investment treaty, as confirmed by Indian Foreign Secretary Vikram Misri on July 22, 2025. These negotiations aim to bolster the already significant economic ties between the two nations, with a focus on furthering cooperation in renewable energy, fisheries, and emerging sectors.

India is one of the Maldives' largest trading partners, with annual bilateral trade nearing USD 500 million. Indian investment is prominent in Maldivian sectors such as tourism and various economic ventures.

Notably, these FTA discussions have gained momentum following the implementation of a Maldives-China FTA in January 2025—a development previously met with concern from New Delhi, given its implications for India’s strategic and economic influence in the region.

Beyond trade agreements, the India-Maldives partnership is multifaceted. Development cooperation features prominently, with India providing concessional lines of credit, grants, and buyer’s credit for infrastructural projects.

The flagship Greater Male Connectivity Project—connecting four key islands—is seen as a transformative initiative for the Maldives’ infrastructure. Other areas of support include road, airport, and fisheries infrastructure, as well as social housing tailored to Maldivian needs.

Financially, India has extended significant assistance to the Maldives, including emergency financial support through twin currency swap arrangements. The Maldives has drawn nearly the full allotment of a $400 million swap line, helping to stabilize its economy during recent periods of fiscal stress. Additionally, the State Bank of India continues to subscribe to Maldivian treasury bills, contributing further to monetary stability.

Capacity building is another vital aspect, with the Maldives being a key beneficiary of Indian scholarships and training programs. Security cooperation remains robust: India supports Maldivian defence capacity-building through training, joint naval exercises, and by providing assets for maritime domain awareness, particularly around Exclusive Economic Zone (EEZ) surveillance. Both countries continue to collaborate under the Colombo Security Conclave, reinforcing regional maritime security.

This deepening engagement comes at a significant moment—Prime Minister Narendra Modi’s upcoming state visit to the Maldives (July 25–26, 2025), where he is invited as Guest of Honour for the 60th anniversary of Maldivian independence. This visit is notable as PM Modi’s third to the Maldives, and the first by any Head of State or Government during President Mohamed Muizzu’s tenure.

While relations had faced strains in early 2024 due to offensive remarks made by some Maldivian officials about PM Modi, recent diplomatic efforts—including statements by Maldivian Foreign Minister Moosa Zameer distancing the government from those remarks—have helped restore positive momentum. Both sides are now positioning the FTA negotiations and broadened cooperation as steps to further cement their historic, strategic partnership and promote stability, prosperity, and security in the Indian Ocean region.

Based On ANI Report