India has decided to extend a $565 million line of credit to the Maldives, Prime Minister Narendra Modi said on Friday after bilateral meetings between the two countries.

PM Modi arrived in the Maldives on Friday on a two-day visit, during which he attend the archipelago nation's 60th Independence Day celebrations as the chief guest.

While addressing the a briefing in Maldives with President Mohamed Muizzu, PM Modi said, “For us it is always friendship first.”

He said that India is Maldives' closest neighbour even as he lauded the bilateral relations between the two countries.

“This year, India and Maldives are also celebrating 60 years of their diplomatic relations. But the roots of our relations are older than history and as deep as the sea. The commemorative stamps released today display traditional boats of both nations. This reflects that we are not just neighbours but also co-passengers,” PM Modi said.

He further said that the friendship between the two countries “will remain bright and clear.”

Relations between the two countries soured soon after Muizzu took office with a pledge to end the Maldives' ‘India first’ policy, and upgraded ties with China.

Muizzu, rose to power in the island nation in November 2023 after leading "India Out" campaign. However, he had later denied any such agenda, asserting that the island nation had a "serious problem" with the presence of foreign military on its soil.

After taking oath, Muizzu called for the withdrawal of Indian military personnel from the Maldives. In response, India replaced them with civilian staff.

India however, regained its influence as it helped to prevent the $7.5-billion Maldives economy from defaulting on its debt, Reuters reported.

(With inputs from agencies)