India and the Maldives are set to put their strained ties behind them as analysts point out that a new bilateral partnership signals that the two neighbours want to foster closer cooperation on the economic and security fronts.
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After holding talks with Maldives President Mohamed Muizzu in New Delhi, Indian Prime Minister Narendra Modi announced on Monday that the two countries had signed a US$400-million currency swap agreement and that India would further support the cash-strapped archipelago nation with a rollover of US$100 million treasury bills.
“India has consistently acted as the first responder for the Maldives,” Modi said.
“To provide strategic direction to our mutual cooperation, we have adopted the vision of the Comprehensive Economic and Maritime Security Partnership. Development partnership is a key pillar of our relationship. And we always give preference to the priorities of Maldivian people in this context.”
Under the currency swap agreement, companies from both countries can do business with each other in local currencies rather than US dollars.
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Delhi also said it would help develop a commercial port at Thilafushi Island, located off Male, to ease shipping congestion in the Maldives.