India's Modi announces credit worth $565 million to the Maldives and launches free trade talks
COLOMBO, Sri Lanka--Indian Prime Minister Narendra Modi on Friday announced a $565-million line of credit to the Maldives during a visit to the Indian Ocean archipelago, as the two countries launched formal talks for a free-trade agreement.
Modi is visiting the Maldives, known for its upmarket tourist resorts, to mark the 60th anniversary of its independence and diplomatic relations between the two countries. The announcement came during Modi's joint media statement with Maldives' President Mohamed Muizzu.
The two-day visit is crucial to India's ambition to control the seas and shipping routes of the Indian Ocean in a race with its regional rival China. It also marks the further easing of diplomatic tensions between the two nations that followed the election of pro-China Muizzu in 2023.
Regional powers India and China compete for influence in the archipelago nation, which is strategically located in the Indian Ocean.
On Friday, Modi witnessed the exchange of agreements to cooperate in sectors such as fisheries, health, tourism and digital development. He also formally handed dozens of heavy vehicles to the Maldives' defense forces.
'India is Maldives' closest neighbor. Maldives holds an important place in both India's neighborhood- first policy and ocean vision," Modi said. 'India is also proud to be Maldives' most trusted friend.'
The line of credit will be used for 'infrastructure and development projects in line with the priorities of the people of the Maldives,' he said.
"India will continue to support Maldives in developing its defense capabilities. Peace, stability and prosperity in the Indian Ocean region is our common goal," he added.
During Muizzu's visit to India last October, India announced financial support to the cash-strapped Maldives in the form of a $100-million treasury bills rollover and the countries signed a $400-million currency swap agreement.
Tensions between India and the Maldives grew since Muizzu, who favored closer ties with China, was elected in 2023 after defeating India-friendly incumbent Ibrahim Mohamed Solih. Leading up to the election, Muizzu had promised to expel Indian soldiers deployed in the Maldives to help with humanitarian assistance. Last year New Delhi replaced dozens of its soldiers in the Maldives with civilian experts.
Measure by Modi to promote tourism in India's Lakshadweep archipelago, off the southwestern coast of the Indian mainland, also sparked anger from Maldivians, who saw it as a move to lure Indian tourists away from their country. Indian celebrities then called for a tourism boycott to the Maldives.
The dispute deepened when Muizzu visited China ahead of India in January last year, a move seen by New Delhi as a snub. On his return, Muizzu spelled out plans to rid his tiny nation of dependence on India for health facilities, medicines and import of staples.
Relations started to improve after Muizzu attended Modi's swearing-in ceremony for a third five-year term. Muizzu has toned down his anti-Indian rhetoric, and official contacts with New Delhi have intensified as concerns grew about Maldives' economy.
India has long been a critical provider of development assistance to the Maldives. Meanwhile, the Maldives joined China's Belt and Road Initiative in 2013 to build ports and highways and expand trade as well as China's influence across Asia, Africa, and Europe.
Modi will attend the Maldives' 60th independence anniversary from being a British protectorate on Saturday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
31 minutes ago
- Japan Times
U.S., China to resume tariff talks in effort to extend truce
Senior U.S. and Chinese negotiators meet in Stockholm on Monday to tackle longstanding economic disputes at the center of a trade war between the world's top two economies, aiming to extend a truce keeping sharply higher tariffs at bay. China is facing an Aug. 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached a preliminary deal in June to end weeks of escalating tit-for-tat tariffs. Without an agreement, global supply chains could face renewed turmoil from duties exceeding 100%. The Stockholm talks, led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, come right on the heels of Trump's biggest trade deal yet, with the European Union accepting a 15% tariff on its goods exports to the U.S. and agreeing to make significant EU purchases of U.S. energy and military equipment. That deal struck with European Commission President Ursula von der Leyen on Sunday in Scotland also calls for $600 billion in investments in the U.S. by the EU, Trump told reporters. No similar breakthrough is expected in the U.S.-China talks, but trade analysts said that another 90-day extension of a tariff and export control truce struck in mid-May was likely. An extension of that length would prevent further escalation and help create conditions for a potential meeting between Trump and Chinese President Xi Jinping in late October or early November. Spokespersons for the White House and U.S. Trade Representative's office did not immediately respond to requests for comment on a South China Morning Post report quoting unnamed sources as saying the two sides would refrain from introducing new tariffs or take other steps that could escalate the trade war for another 90 days. The container ship OOCL Daffodil is docked at Yangshan Port outside of Shanghai, China, on June 17. | REUTERS Trump's administration is poised to impose new sectoral tariffs that will impact China, including on semiconductors, pharmaceuticals, ship-to-shore cranes and other products. "We're very close to a deal with China. We really sort of made a deal with China, but we'll see how that goes," Trump told reporters before his meeting with von der Leyen, providing no further details. Deeper issues Previous U.S.-China trade talks in Geneva and London in May and June focused on bringing U.S. and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia's H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include U.S. complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that U.S. national security export controls on tech goods seek to stunt Chinese growth. "Stockholm will be the first meaningful round of U.S.-China trade talks," said Bo Zhengyuan, Shanghai-based partner at China consultancy firm Plenum. Visitors pose for photos at a lookout in Yangshan Port outside of Shanghai, China, on April 15. | REUTERS Trump has been successful in pressuring some other trading partners, including Japan, Vietnam and the Philippines, into deals accepting higher U.S. tariffs of 15% to 20%. Analysts say the U.S.-China negotiations are far more complex and will require more time. China's grip on the global market for rare earth minerals and magnets, used in everything from military hardware to car windshield wiper motors, has proved to be an effective leverage point on U.S. industries. Trump-Xi meeting? In the background of the talks is speculation about a possible meeting between Trump and Xi in late October. Trump has said he will decide soon whether to visit China in a landmark trip to address trade and security tensions. A new flare-up of tariffs and export controls would likely derail any plans for a meeting with Xi. "The Stockholm meeting is an opportunity to start laying the groundwork for a Trump visit to China," said Wendy Cutler, vice president at the Asia Society Policy Institute. Bessent has already said he wants to work out an extension of the Aug. 12 deadline to prevent tariffs snapping back to 145% on the U.S. side and 125% on the Chinese side. Still, China will likely request a reduction of multi-layered U.S. tariffs totaling 55% on most goods and further easing of U.S. high-tech export controls, analysts said. Beijing has argued that such purchases would help reduce the U.S. trade deficit with China, which reached $295.5 billion in 2024. China is currently facing a 20% tariff related to the U.S. fentanyl crisis, a 10% "reciprocal tariff" and 25% duties on most industrial goods imposed during Trump's first term. Bessent has also said he would discuss with He the need for China to rebalance its economy away from exports toward domestic consumer demand. The shift would require China to put an end to a protracted property crisis and boost social safety nets to encourage household spending. Michael Froman, a former U.S. trade representative during Barack Obama's administration, said such a shift has been a goal of U.S. policymakers for two decades. "Can we effectively use tariffs to get China to fundamentally change their economic strategy? That remains to be seen," said Froman, now president of the Council on Foreign Relations think tank.
The Mainichi
an hour ago
- The Mainichi
US and China to talk in Stockholm on trade with eye on Trump-Xi summit later this year
WASHINGTON (AP) -- When top U.S. and Chinese officials meet in Stockholm, they are almost certain to agree to at least leaving tariffs at the current levels while working toward a meeting between their presidents later this year for a more lasting trade deal between the world's two largest economies, analysts say. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to hold talks for the third time this year -- this round in the Swedish capital, nearly four months after President Donald Trump upset global trade with his sweeping tariff proposal, including an import tax that shot up to 145% on Chinese goods. "We have the confines of a deal with China," Trump said Friday before leaving for Scotland. Bessent told MSNBC on Wednesday that the two countries after talks in Geneva and London have reached a "status quo," with the U.S. taxing imported goods from China at 30% and China responding with a 10% tariff, on top of tariffs prior to the start of Trump's second term. "Now we can move on to discussing other matters in terms of bringing the economic relationship into balance," Bessent said. He was referring to the U.S. running a $295.5 billion trade deficit last year. The U.S. seeks an agreement that would enable it to export more to China and shift the Chinese economy more toward domestic consumer spending. The Chinese embassy in Washington said Beijing hopes "there will be more consensus and cooperation and less misperception" coming out of the talks. With an eye on a possible leaders' summit, Stockholm could provide some answers as to the timeline and viability of that particular goal ahead of a possible meeting between Trump and Chinese leader Xi Jinping. "The meeting will be important in starting to set the stage for a fall meeting between Trump and Xi," said Wendy Cutler, a former U.S. trade negotiator and now vice president at the Asia Society Policy Institute. "Beijing will likely insist on detailed preparations before they agree to a leaders' meeting." In Stockholm, the two sides are likely to focus on commercial announcements to be made at a leaders' summit as well as agreements to address "major irritants," such as China's industrial overcapacity and its lack of control over chemicals used to make fentanyl, also to be announced when Xi and Trump should meet, Cutler said. Sean Stein, president of the U.S.-China Business Council, said Stockholm could be the first real opportunity for the two governments to address structural reform issues including market access in China for U.S. companies. What businesses will be seeking coming out of Stockholm would largely be "the atmosphere" -- how the two sides characterize the discussions. They will also look for clues about a possible leaders' summit because any real deal will hinge on the two presidents meeting each other, he said. Fentanyl-related tariffs are likely a focus for China In Stockholm, Beijing will likely demand the removal of the 20% fentanyl-related tariff that Trump imposed earlier this year, said Sun Yun, director of the China program at the Washington-based Stimson Center. This round of the U.S.-China trade dispute began with fentanyl, when Trump in February imposed a 10% tariff on Chinese goods, citing that China failed to curb the outflow of the chemicals used to make the drug. The following month, Trump added another 10% tax for the same reason. Beijing retaliated with extra duties on some U.S. goods, including coal, liquefied natural gas, and farm products such as beef, chicken, pork and soy. In Geneva, both sides climbed down from three-digit tariffs rolled out following Trump's "Liberation Day" tariffs in April, but the U.S. kept the 20% "fentanyl" tariffs, in addition to the 10% baseline rate -- to which China responded by keeping the same 10% rate on U.S. products. These across-the-board duties were unchanged when the two sides met in London a month later to negotiate over non-tariff measures such as export controls on critical products. The Chinese government has long protested that American politicians blame China for the fentanyl crisis in the U.S. but argued the root problem lies with the U.S. itself. Washington says Beijing is not doing enough to regulate precursor chemicals that flow out of China into the hands of drug dealers. In July, China placed two fentanyl ingredients under enhanced control, a move seen as in response to U.S. pressure and signaling goodwill. Gabriel Wildau, managing director at the consultancy Teneo, said he doesn't expect any tariff to go away in Stockholm but that tariff relief could be part of a final trade deal. "It's possible that Trump would cancel the 20% tariff that he has explicitly linked with fentanyl, but I would expect the final tariff level on China to be at least as high as the 15-20% rate contained in the recent deals with Japan, Indonesia, Vietnam," Wildau said. US wants China to dump less, buy less oil from Russia and Iran China's industrial overcapacity is as much a headache for the United States as it is for the European Union. Even Beijing has acknowledged the problem but suggested it might be difficult to address. America's trade imbalance with China has decreased from a peak of $418 billion in 2018, according to the Census Bureau. But China has found new markets for its goods and as the world's dominant manufacturer ran a global trade surplus approaching $1 trillion last year -- somewhat larger than the size of the U.S. overall trade deficit in 2024. And China's emergence as a manufacturer of electric vehicles and other emerging technologies has suddenly made it more of a financial and geopolitical threat for those same industries based in the U.S., Europe, Japan and South Korea. "Some enterprises, especially manufacturing enterprises, feel more deeply that China's manufacturing capabilities are too strong, and Chinese people are too hardworking. Factories run 24 hours a day," Chinese Premier Li Qiang said on Thursday when hosting European Commission President Ursula von der Leyen in Beijing. "Some people think this will cause some new problems in the balance of supply and demand in world production." "We see this problem too," Li said. Bessent also said the Stockholm talks could address Chinese purchases of Russian and Iranian oil. However, Wildau of Teneo said China could demand some U.S. security concessions in exchange, such as a reduced U.S. military presence in East Asia and scaled-back diplomatic support for Taiwan and the Philippines. This would likely face political pushback in Washington. The Stockholm talks will be "geared towards building a trade agreement based around Chinese purchase commitments and pledges of investment in the U.S. in exchange for partial relief from U.S. tariffs and export controls," Wildau said. He doubts there will be a grand deal. Instead, he predicts "a more limited agreement based around fentanyl." "That," he said, "is probably the preferred outcome for China hawks in the Trump administration, who worry that an overeager Trump might offer too much to Xi."
Yomiuri Shimbun
an hour ago
- Yomiuri Shimbun
US-EU Deal Sets a 15% Tariff on Most Goods and Averts the Threat of a Trade War with a Global Shock
EDINBURGH, Scotland (AP) — The United States and the European Union agreed on Sunday to a trade framework setting a 15% tariff on most goods, staving off — at least for now — far higher imports on both sides that might have sent shock waves through economies around the globe. The sweeping announcement came after President Donald Trump and European Commission chief Ursula von der Leyen met briefly at Trump's Turnberry golf course in Scotland. Their private sit-down culminated months of bargaining, with the White House deadline Friday nearing for imposing punishing tariffs on the EU's 27 member countries. 'It was a very interesting negotiation. I think it's going to be great for both parties,' Trump said. The agreement, he said, was 'a good deal for everybody' and 'a giant deal with lots of countries.' Von der Leyen said the deal 'will bring stability, it will bring predictability, that's very important for our businesses on both sides of the Atlantic.' Many facets will require more work As with other, recent tariff agreements that Trump announced with countries including Japan and the United Kingdom, some major details remain pending in this one. Trump said the EU had agreed to buy some $750 billion worth of U.S. energy and invest $600 billion more than it already is in America — as well as make a major military equipment purchase. He said tariffs 'for automobiles and everything else will be a straight across tariff of 15%' and meant that U.S. exporters 'have the opening up of all of the European countries.' Von der Leyen said the 15% tariffs were 'across the board, all inclusive' and that 'indeed, basically the European market is open.' At a later news conference away from Turnberry, she said the $750 billion in additional U.S. energy purchases was actually over the next three years — and would help ease the dependence on natural gas from Russia among the bloc's countries. 'When the European Union and the United States work together as partners, the benefits are tangible,' Von der Leyen said, noting that the agreement 'stabilized on a single, 15% tariff rate for the vast majority of EU exports' including cars, semiconductors and pharmaceuticals. '15% is a clear ceiling,' she said. But von der Leyen also clarified that such a rate wouldn't apply to everything, saying that both sides agreed on 'zero for zero tariffs on a number of strategic products,' like all aircraft and component parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. It is unclear if alcohol will be included in that list. 'And we will keep working to add more products to this list,' she said, while also stressing that the 'framework means the figures we have just explained to the public, but, of course, details have to be sorted out. And that will happen over the next weeks.' Further EU approval needed In the meantime, there will be work to do on other fronts. Von der Leyen had a mandate to negotiate because the European Commission handles trade for member countries. But the Commission must now present the deal to member states and EU lawmakers, who will ultimately decide whether or not to approve it. Before their meeting began, Trump pledged to change what he characterized as 'a very one-sided transaction, very unfair to the United States.' 'I think both sides want to see fairness,' the Republican president told reporters. Von der Leyen said the U.S. and EU combined have the world's largest trade volume, encompassing hundreds of millions of people and trillions of dollars and added that Trump was 'known as a tough negotiator and dealmaker.' 'But fair,' Trump said. Trump has spent months threatening most of the world with large tariffs in hopes of shrinking major U.S. trade deficits with many key trading partners. More recently, he had hinted that any deal with the EU would have to 'buy down' a tariff rate of 30% that had been set to take effect. But during his comments before the agreement was announced, the president was asked if he'd be willing to accept tariff rates lower than 15%, and he said 'no.' First golf, then trade talk Their meeting came after Trump played golf for the second straight day at Turnberry, this time with a group that included sons Eric and Donald Jr. In addition to negotiating deals, Trump's five-day visit to Scotland is built around golf and promoting properties bearing his name. A small group of demonstrators at the course waved American flags and raised a sign criticizing British Prime Minister Keir Starmer, who plans his own Turnberry meeting with Trump on Monday. Other voices could be heard cheering and chanting 'Trump! Trump!' as he played nearby. On Tuesday, Trump will be in Aberdeen, in northeastern Scotland, where his family has another golf course and is opening a third next month. The president and his sons plan to help cut the ribbon on the new course. The U.S. and EU seemed close to a deal earlier this month, but Trump instead threatened the 30% tariff rate. The deadline for the Trump administration to begin imposing tariffs has shifted in recent weeks but is now firm and coming Friday, the administration insists. 'No extensions, no more grace periods. Aug. 1, the tariffs are set, they'll go into place, Customs will start collecting the money and off we go,' U.S. Commerce Secretary Howard Lutnick told 'Fox News Sunday' before the EU deal was announced. He added, however, that even after that 'people can still talk to President Trump. I mean, he's always willing to listen.' Without an agreement, the EU said it was prepared to retaliate with tariffs on hundreds of American products, ranging from beef and auto parts to beer and Boeing airplanes. If Trump eventually followed through on his threat of tariffs against Europe, meanwhile, it could have made everything from French cheese and Italian leather goods to German electronics and Spanish pharmaceuticals more expensive in the United States. 'I think it's great that we made a deal today, instead of playing games and maybe not making a deal at all,' Trump said. 'I think it's the biggest deal ever made.'
