India extends soft loan of $250 million to Maldives in largest bilateral financial aid during Covid-19

Abdulla Shahid, Narendra Modi are posing for a picture

Indian government on Sunday handed a cheque of USD 250 million (roughly Rs 1,840 crores) as financial assistance to the Maldives. This aid comprised the “largest financial support package announced by a bilateral partner during Covid-19,” Maldives Foreign Minister Abdulla Shahid said.

He went on to add, “India has proven time and time again that the Maldives-India partnership will be a high priority! While the whole world has had to close their borders, and their homes, India has proven that #Covid19 will not force them to close their hearts to the Maldivian people.”

Maldivian Foreign Minister Abdulla Shahid also stated that India provided this financial assistance through the subscription of Government of Maldives Domestic Treasury Bonds through the State Bank of India (SBI). This move will “support the financing of the revenue gap, and meet the Gov’s immediate financing needs,” Shahid went on to add.

He further pointed out, “With the USD 1.4 billion financial package announced in December 2018 and the cash grants for community projects, this is by far the largest single donor assistance the Maldives has received.”

In August of this year, External Affairs Minister (EAM) Dr S Jaishankar had told his Maldivian counterpart, Abdulla Shahid, that New Delhi is ready to fund the Greater Male Connectivity Project (GMCB). This was to be done through a USD 100 million grant and a USD 400 million line of credit.

Several analysts have pointed out that this is part of a larger project to court influence against China in the Maldives. The archipelago commands strategic importance owing to its grip on major shipping routes.

Just recently, India welcomed the US-Maldives military agreement. On the other hand, India’s growing bilateral ties with the Maldives since President Mohamed Solih came to power has led to protests fuelled by former President Abdulla Yameen-led Progressive Party of Maldives-People’s National Congress (PPM-PNC).

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