India and the Maldives are taking significant steps to reset and strengthen bilateral ties as Prime Minister Narendra Modi lands in the island nation on Friday, following his visit to the United Kingdom. The trip marks PM Modi's first visit to the Maldives since President Mohamed Muizzu assumed office in November 2023. PM Modi's two-day visit coincides with the Maldives' 60th Independence Day celebrations, where he will attend as the guest of honour. His visit also marks 60 years of diplomatic relations between the two countries, with India being among the first nations to recognise the Maldives after it gained independence in 1965.
This is PM Modi's third visit to the Maldives since taking office in 2014, and it comes at a time when both countries are seeking to explore a new chapter in their relationship. The visit is expected to open key avenues for cooperation, especially in the economic and digital sectors.
Focus on UPI and FTA talks
A major highlight of the trip is the anticipated launch of India's Unified Payments Interface (UPI) services in the Maldives, a move seen as a step towards deepening financial connectivity. In addition, India and the Maldives are likely to initiate discussions on a Free Trade Agreement (FTA) for 2025. The two countries had earlier signed a trade agreement in 1981.
Bilateral trade on the rise
It is to be noted here that bilateral trade between India and the Maldives reached approximately $548 million in 2023, more than double the $245 million recorded in 2020. India mainly imports scrap metal from the Maldives while exporting a wide range of goods, including engineering products, pharmaceuticals, cement, agricultural produce such as rice, spices, fruits, vegetables and poultry.
Strategic push amid China factor
This economic engagement is particularly important in the backdrop of the Maldives' existing FTA with China, which came into effect on January 1. India’s renewed focus on trade and strategic cooperation comes at a crucial juncture. PM Modi and President Muizzu are also expected to review the Comprehensive Economic and Maritime Security Partnership that was formalised in October 2024. The review is expected to cover various aspects of maritime cooperation and regional security in the Indian Ocean.
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