News & press releases

India extends financial support of 250 million US Dollars to the Maldives

13 August 2020

The Government of India has extended a financial package worth 250 million US dollars to the Government of Maldives.

This financial package will support the Maldives in meeting the Government’s financing gap, and support the Government’s efforts in responding to Covid19. The financial assistance was announced during a Digital Video Conference held today, between the Minister of Foreign Affairs of Maldives Abdulla Shahid and Minister of External Affairs of India Dr. Subrahmanyam Jaishankar.


Several other significant decisions on multiple initiatives were also made during the meeting. This included the announcement from the Government of India of a financial package of 500 million US Dollars, for the Greater Malé Connectivity Project. The Project will connect Malé, Villingili, Thilafushi and Gulhifalhu, via bridges and causeways of total length of 6.695 kilometers. Once completed, the Project will be the single largest infrastructure project in the Maldives.


During the meeting, the Governments of Maldives and India also agreed to establish an Air Bubble between the countries. This is the first Air Bubble established in South Asia. With this announcement, regular scheduled flights will commence between the two countries, enabling the further strengthening of the traditionally strong people-to-people contact. Relevant public health related requirements against Covid19 will continue to be observed by both countries. Minister Shahid thanked the Indian Government for including the Maldives among the first countries with which India has established an Air Bubble. He emphasised the importance of easing travel, especially for Maldivians seeking to visit India for urgently required medical treatment, as well as Indian tourists wishing to visit the Maldives.


The meeting also reviewed progress on the ongoing development projects between the two countries. In this context, the two ministers acknowledged the good progress being made on the projects that are being considered under the 800 million US Dollar Line of Credit. The 800 million US Dollar Line of Credit was announced during the State Visit of President Ibrahim Mohamed Solih to India in December 2018, for which the Agreement was signed between the Indian Export Import Bank and the Ministry of Finance in March 2019. Several key infrastructure projects are currently being considered for financing under the Line of Credit. Both Ministers agreed to work towards further accelerating implementation on these key infrastructure projects.


Both Ministers also agreed on the significance of the smaller projects, which are being carried out under the Indian High Impact Community Development Projects Scheme, and the cash grant of MVR 106 million by the Government of India. Nineteen projects in 74 inhabited islands, in eighteen atolls, have been approved for financing under the cash grant, and nine projects are being implemented under the High Impact Community Development Scheme.


Minister Jaishankar also confirmed the renewal of the quotas for the import of essential commodities from India to the Maldives. These essential commodities include rice, sugar, flour, onions, potatoes, eggs, dhal, stone aggregates and river sand. Minister Jaishankar further noted that the quota approved is larger than the amount approved last year, which he hoped would help ensure predictability of imports during this difficult time. Minister Shahid thanked the Government of India for renewing the quota for this year for all the essential commodities, and for the uninterrupted supply of essential items during the pandemic. And for the special exemptions made for the Maldives in this regard.


The Ministers also reflected on the sea links between the countries as a way to enhance trade and commerce, and welcomed the announcement that the cargo ferry service between Cochin, Kulhudhufushi-Malé will be operationalised within the next few months.


Minister Shahid thanked the Minister of External Affairs and the Government of India for India’s continued support for the development of the Maldives. He noted that India has been among the first to respond during this pandemic, as it has with every crisis the Maldives has faced.


On 1 November 2020, the Maldives and India will celebrate 55 years since the establishment of formal diplomatic relations between the two countries. Both countries share traditionally strong and friendly ties, enjoy a strong developmental partnership, and vibrant people-to-people connections, nurtured by geographical proximity, ethnic, historic, socio-economic, and cultural ties. Both Ministers noted that Maldives’ ‘India First’ policy and India’s ‘Neighbourhood First’ policy were working in tandem to further strengthen a dynamic, multifaceted and mutually beneficial partnership that rests on the foundation of mutual trust, understanding and sensitivity to each other’s concerns.


Both Ministers acknowledged that the relationship has undergone a significant revitalisation, and experienced renewed dynamism since President Ibrahim Mohamed Solih assumed office on 17 November 2018. They agreed that the frequent exchanges at the highest levels, ministerial visits, and a record number of agreements have resulted in an expanded scope of cooperation between the two countries, towards the mutual benefit of both peoples.


ENDS