In a bold move to reshape the balance of power in the Indian Ocean, Indian Prime Minister Narendra Modi and Maldivian President Mohamed Muizzu sealed a landmark agreement on October 7, 2024. With a focus on defense, trade, and energy security, the leaders charted a future of unprecedented cooperation, setting the stage for a robust economic and maritime security partnership aimed at stabilizing the region. India reaffirmed its unwavering support, while the Maldives acknowledged India’s pivotal role in its financial recovery and national security.
Bolstering Maritime Security in the Indian Ocean
A key focus of the talks was enhancing maritime security cooperation between India and Maldives. Both nations face common threats, including piracy, illegal fishing, drug trafficking, and terrorism, all of which require coordinated responses. With its vast Exclusive Economic Zone (EEZ), the Maldives is on the front line of these challenges.
India has committed to providing defense platforms and advanced surveillance systems to bolster the operational capabilities of the Maldives National Defence Force (MNDF). This includes the timely completion of the MNDF ‘Ekatha’ harbour project at Uthuru Thila Falhu (UTF), a vital initiative supported by India to enhance Maldives’ maritime security infrastructure.
The agreement goes beyond traditional defense assistance. India and Maldives will also work together on hydrography and disaster response, further cementing their role as natural partners in maintaining stability in the Indian Ocean Region (IOR). Capacity building, training programs, and additional funding for the MNDF are also on the agenda, ensuring that the Maldives is equipped to handle both current and future security challenges.
Driving Trade and Investment: A New Frontier
On the economic front, both leaders acknowledged the untapped potential for increased trade and investment between their countries. A major step forward is the initiation of discussions on a Bilateral Free Trade Agreement (FTA) that would simplify trade in goods and services, potentially boosting economic cooperation to new heights.
The decision to operationalize local currency trade settlements between India and the Maldives marks a significant milestone. By reducing dependency on foreign currencies, both nations aim to strengthen trade linkages and economic resilience. This move is expected to benefit sectors like agriculture, fisheries, and tourism, which remain the backbone of the Maldivian economy.
In line with Maldives’ focus on economic diversification, the two countries will also collaborate on agriculture and fisheries, key areas that hold significant potential for growth. Plans are in place to establish an Agriculture Economic Zone in Haa Dhaalu atoll and a fish processing facility in Haa Alifu atoll, leveraging India’s expertise and investment.