After meeting with President of Maldives Dr. Mohamed Muizzu in New Delhi on Monday, India’s Prime Minister Narendra Modi has announced an increase in aid to the Maldives.

Following discussions, PM Modi announced that India would provide financial assistance to the Maldives, which is currently facing a financial crisis, by delaying the repayment of USD 100 million in treasury bills.

In addition to this, the two neighboring countries have signed a currency swap agreement worth USD 400 million and INR 30 billion.

Speaking to state media regarding the aid arranged by the government of India, Minister of Foreign Affairs Abdulla Khaleel said that in addition to signing the USD 400 million currency swap agreement, INR 30 billion which is approximately USD 360 million, totaling USD 760 million in currency swaps, have been signed.

FM Khaleel said this would reduce dependence on the U.S. dollar.

Further, the foreign minister added that discussions were held on strengthening trade relations using the currencies of both countries and that discussions touched upon commencing work on a Free Trade Agreement (FTA) with India as well.

Khaleel stated that this aid would be a massive opportunity to greatly facilitate the Maldivian people, the Maldivian economy, and businesses of both countries.

At Monday's meeting, the leaders of both countries virtually inaugurated the new runway of Hanimaadhoo International Airport, which is being developed with the assistance of the Indian government.

PM Modi stated that he would expedite the work on the Greater Malé Connectivity Project, which is progressing with India's assistance.

Speaking at a joint press conference alongside President Muizzu, PM Modi said that India is the Maldives’ closest neighbor and friend, adding that the Maldives holds an important position in India's "Neighborhood First" policy.

After the meeting, Muizzu described India as an important partner in the Maldives' socio-economic and infrastructural development journey and has been with the Maldives when the island nation needed their help.

He added that the currency swap agreement would help solve the foreign currency issues currently facing the island nation.

The Maldives Monetary Authority (MMA) signed and exchanged documents for a currency swap agreement with the Reserve Bank of India (RBI) for USD 400 million and INR 30 billion following the meeting between Muizzu and PM Modi.

Under the agreement, MMA will be able to access swaps in U.S. dollars or Euros and Indian Rupees.

The government earlier stated that the U.S dollar or Euro swap facility will be a measure to assist with short-term foreign exchange needs.

Further, the government added that this would facilitate the use of Indian Rupees for trade transactions between the two neighboring countries.

Muizzu is in India on his first-ever bilateral visit to the neighboring country since assuming office in November 2023, upon the official invitation of India’s President Droupadi Murmu.