PM Modi’s Maldives Visit: India’s UPI Enhances Transactions, Local Currency Settlement System Allows Rufiyaa-Rupee Trade

Male: Prime Minister Narendra Modi, during his state visit to the Maldivian capital city of Male, outlined the importance of bilateral relations between India and the Maldives, stressing on their shared goals of peace, stability, and prosperity in the Indian Ocean region. During his visit, PM Modi also appreciated the progress made in strengthening India-Maldives partnership, citing key initiatives that will boost economic cooperation, defence ties, UPI and regional security. Maldivian President Mohamed Muizzu lauded India’s cooperation and support to the country and hailed PM Modi’s leadership. 

The prime minister’s one of the pivotal moments of the visit was the announcement of a local currency settlement system, allowing trade to be conducted directly in ‘Rufiyaa’ and ‘Rupee’. The mutual move is expected to reduce dependency on foreign currencies and enhance economic resilience. “Our goal now is to move from paperwork to prosperity,” PM Modi said, asserting that the possibility of the system to transform trade between the two nations. He expressed his hope saying that the promotion of India’s Unified Payments Interface (UPI) in the Maldives will also strengthen both tourism and retail sectors, making transactions easier for Indian tourists and residents.

Addressing the media personnel in Male, PM Narendra Modi said, “Our goal now is to move from paperwork to prosperity. With the local currency settlement system, trade can now be conducted directly in Rufiyaa and Rupee. The pace at which UPI is being promoted in the Maldives will strengthen both tourism and retail sectors.”

Prime Minister Modi emphasised that India’s ‘Neighborhood First’ policy prioritises the Maldives as a key partner in the Indian Ocean region. “India is the closest neighbor of the Maldives. The Maldives holds an important place in India’s ‘Neighborhood First’ policy and its vision for the Indian Ocean,” PM Modi said. “India is proud to be the Maldives’ most trusted and reliable friend,” he added.

The prime minister stated that extending mutual cooperation in defence and security is also an important step of the India-Maldives strategic partnership. The inauguration of the Defence Ministry building in Male symbolized the strong partnership between the two countries. “Mutual cooperation in the field of defence and security is a symbol of our mutual trust. The Defence Ministry building, which is being inaugurated today, is not just a concrete structure, it is a strong symbol of our robust partnership.” 

Notably, India has been a consistent partner in providing defence platforms to the Maldives, including Dornier aircraft and maritime vessels, which have proven crucial for various operations. The recent transfer of defence equipment worth Rs 35 crore further explains India’s commitment to supporting its neighbour’s defence capabilities.

During the meeting between the leaders of the two country, it was stated that the ‘Colombo Security Conclave’ will play a vital role in strengthening regional maritime security, addressing common threats such as piracy, illegal fishing, and transnational crime. ““Peace, stability, and prosperity in the Indian Ocean region are our shared goals. Together, through the Colombo Security Conclave, we will strengthen regional maritime security. Climate change is a major challenge for both our countries. We have decided to promote renewable energy, and in this sector, India will share its experience with the Maldives,” PM Modi said, adding that the importance of cooperation in maintaining regional stability. India has committed to enhancing the Maldives’ maritime security infrastructure, including the ‘Ekatha’ harbour project at Uthuru Thila Falhu (UTF), to improve the country’s surveillance and emergency response capabilities.

PM Narendra Modi also announced that ferry system will be launched between the two nations making travel easy to the Islands. He said, “Soon, with the launch of the ferry system, travel between different islands will become easier. After that, distances between islands will not be measured by GPS, but only by ferry time. To give new momentum to our development partnership, we have decided to extend a Line of Credit worth 565 million dollars, approximately Rs 5000 crore, to the Maldives.”

The Indian prime minister stressed that climate change is a major challenge for both India and the Maldives, and the two countries have decided to promote renewable energy cooperation. With the PM in Maldives, India will share its experience in solar power with the Maldives, exploring opportunities for joint research, capacity building, and exchange of expertise on energy efficiency. The collaboration is expected to drive down energy costs and reduce reliance on traditional energy sources.

To give new momentum to their development partnership, India has extended a Line of Credit worth $565 million to the Maldives. India’s financial support will facilitate various development projects, including the construction of 4000 social housing units, the Greater Male Connectivity Project, the Addu Road Development Project, and the redeveloped Hanimaadhoo International Airport. These projects will transform the region into an important transit and economic hub, benefiting many families in the Maldives.

PM Modi said, “Several projects have been inaugurated. The 4000 social housing units built with India’s assistance will now become a new beginning and a new home for many families in the Maldives. The Greater Male Connectivity Project, the Addu Road Development Project, and the redeveloped Hanimaadhoo International Airport will transform this entire region into an important transit and economic hub.”