Free Trade Agreement on the Agenda as Modi Heads to Maldives

India and the Maldives are in active discussions to establish a Free Trade Agreement (FTA) and a broader investment treaty, as both nations look to strengthen diplomatic and economic ties ahead of Indian Prime Minister Narendra Modi’s upcoming visit to Malé.

Modi is scheduled to visit the Maldives on July 25–26, where he will attend the country’s 60th Independence Day celebrations as the guest of honor. The visit will be Modi’s first under President Dr Mohamed Muizzu’s administration and is seen as a step toward renewed cooperation after a period of diplomatic strain.

Government officials from both sides have confirmed that talks are ongoing not only on a potential FTA, but also on increased collaboration in key sectors such as renewable energy and fisheries. The investment treaty under discussion is expected to open more opportunities for trade and development between the two countries.

The Maldives had initially proposed the FTA in May this year. While India did not publicly respond at the time, officials have now acknowledged that negotiations are progressing, with both sides aiming to agree on mutually beneficial terms.

Alongside trade and investment talks, India has reiterated its support for the Maldives’ financial stability. Facing large external debt repayments in the coming years, the Maldives has already received currency swap support from India totaling USD 400 million, in addition to an INR 30 billion (approximately USD 357 million) facility. These contributions have helped to bolster the country’s foreign exchange reserves.

Modi’s upcoming visit is expected to feature further announcements on financial assistance and development cooperation, with both governments viewing the occasion as a key moment to reset bilateral relations.

Ties between the two countries had cooled following President Muizzu’s election, marked by strong rhetoric on sovereignty and closer engagement with China. However, diplomatic efforts in recent months, including high-level meetings and visits, have helped improve the relationship.

With Modi’s visit days away, attention now turns to the agreements that may be signed—and whether they will mark a lasting improvement in India–Maldives relations.