PM Modi’s Maldives Visit Marks New Chapter in Bilateral Ties with Focus on UPI, Trade, and Diplomacy

Prime Minister Narendra Modi’s visit to the Maldives on July 25, 2025, marks a major turning point in India-Maldives relations. This is Modi’s third trip to the island nation since he became Prime Minister in 2014. However, this visit holds a special significance, as it comes just months after Mohamed Muizzu took charge as the President of the Maldives in November 2023. The visit was also timed to match the 60th Independence Day celebrations of the Maldives, where PM Modi was invited as the guest of honour.

The timing of the visit is key. India and the Maldives have shared strong diplomatic relations since 1965, when India became one of the first countries to recognise the Maldives’ independence. But over the past few years, there have been moments of distance and tension. With this visit, both sides seem ready to turn a fresh page in their bilateral ties.

In the last decade, India has steadily strengthened its presence in the Indian Ocean region. This visit by PM Modi is not only about celebrating a shared history—it is also about shaping the future. The trip signals a clear desire by both countries to revive and deepen their relationship, particularly in the areas of trade, finance, digital payments, and security.

UPI launch, trade talks show future focus

One of the most talked-about outcomes of this visit is the expected launch of India’s digital payments platform, the Unified Payments Interface (UPI), in the Maldives. This move is more than just a technical partnership—it represents a growing trust in India's digital capabilities. UPI has already proven to be a global success, with several countries showing interest in adopting or partnering with it. For the Maldives, UPI adoption would mean smoother and quicker digital transactions, especially helpful in the tourism and retail sectors.

Another major development is the early-stage discussion on a possible Free Trade Agreement (FTA) between India and the Maldives. The two countries had signed a trade agreement in 1981, but an updated deal could greatly benefit both sides. As of 2023, the trade volume between the two stood at $548 million—double the figure from just three years earlier. India mainly exports engineering goods, cement, pharma products, and food to the Maldives, while importing scrap metal. A fresh FTA could open up more opportunities for Indian businesses and ensure better prices and supplies for Maldivian consumers.

This visit also comes as India tries to balance the growing influence of China in South Asia. The Maldives already has an FTA with China, which came into force on January 1. For India, renewing its trade and security commitments to the Maldives is not just economic—it is also strategic.

Security cooperation and regional strategy in focus

Beyond trade and digital ties, PM Modi and President Muizzu are expected to review the Comprehensive Economic and Maritime Security Partnership that was signed in October 2024. This agreement covers issues like maritime cooperation, joint surveillance, security training, and disaster response. As both nations sit close to key international sea routes, such agreements are crucial for ensuring peace and stability in the Indian Ocean.

With the increasing presence of China in the region, including its port projects and infrastructure investments, India’s outreach to the Maldives has to be seen as a strategic counterbalance. Both India and the Maldives benefit from a stable, secure, and open Indian Ocean. India’s support for Maldivian infrastructure, defence, and economic development plays a key role in helping the island nation maintain its independence while also improving its internal capacity.

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PM Modi’s visit is not just symbolic—it is deeply practical. It sends a message that India values its neighbours, and is willing to engage respectfully, with mutual benefit as the goal. The fact that the Maldives chose Modi as the guest of honour for its national celebration is a strong sign that goodwill still exists.

In conclusion, PM Modi’s 2025 visit to the Maldives reflects a new chapter in regional diplomacy. By pushing forward digital partnerships like UPI, initiating trade talks, and deepening security ties, India is laying the groundwork for a balanced and respectful friendship. For the Maldives, this opens doors to more choices and greater stability. And for South Asia, it hints at a future where small nations can thrive with big partners—without having to choose sides in global power games.