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Posted 08 Oct 2024

2 min read

Key Outcomes of Maldives President's Visit to India include

  • Both sides announcedadoption of vision for comprehensive economic and maritime security partnership which encompasses- 
    • Development Cooperation: Agreed to support timely completion of Greater Malé Connectivity Project, etc. 
    • Trade and economic cooperation: Initiate discussions on Bilateral Free Trade Agreement; both sides agreed to operationalize settlement of trade transactions in local currencies to reduce dependency on foreign currencies etc.
    • Digital and financial initiatives: Launch of RuPay card in Maldives will enhance ease of payments for Indian tourists visiting Maldives etc.
    • Health cooperation: To work towards recognition of Indian pharmacopoeia by Government of Maldives, followed by establishment of India-Maldives Jan Aushadhi Kendras across Maldives etc.
  • Both sides signed Currency Swap Agreement (CSA) of USD 400 million and INR 30 billion to help Maldives in managing their foreign exchange reserves.
    • It was signed under SAARC Currency Swap Framework 2024-27.
    • CSA is a contract under which two counterparties agree to exchange two currencies at a set rate and then to re-exchange those currencies at an agreed upon rate at a fixed date in future.
      • Earlier, India had signed CSA with Sri Lanka, Japan etc.

Importance of Maldives for India

  • India’s ‘Neighbourhood First’ policy (NFP): Maldives is one of the cornerstones of NFP and SAGAR (Security and Growth for All in the Region) due to its location.
  • Strategic: Maldives is geographically positioned like a ‘toll gate’ between western Indian Ocean chokepoints (Gulf of Aden and Strait of Hormuz), and eastern Indian Ocean chokepoint of Strait of Malacca.

India- Maldives relations

  • Maldives was the first country to receive Covid-19 vaccines from India.
  • India emerged as Maldives’ largest trade partner in 2023.
  • India provided water aid to Male through Operation NEER.
  • Tags :
  • RuPay card
  • India-Maldives Relations
  • Currency Swap Agreement
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