India provides $250 million worth financial assistance to the Maldives

NEW DELHI: India on Sunday provided $250 million worth in financial assistance, as budgetary support, to the Maldives to help the country tackle economic hardship that followed the coronavirus pandemic.

The ceremony was held on Sunday at the ministry of foreign affairs of Maldives, a statement from the Indian mission in Maldives said. Foreign minister Abdulla Shahid, finance minister Ibrahim Ameer, high commissioner Sunjay Sudhir and the head of State Bank of India (SBI) Male, Bharat Mishra, were those who took part in the handover ceremony.

The funds have been made available to the Maldives in response to a request by Maldivian President Ibrahim Mohamed Solih during a recent telephone call with Prime Minister Narendra Modi. The assistance “is being provided under the most favourable terms possible to the Government of Maldives," the Indian mission statement said. It is to be made available through aTreasury Bond sale to the State Bank of India (SBI), Male, which has a tenure of 10 years for repayment.

“The budgetary support of $ 250 million is extended without conditions; the Government of Maldives is at liberty to use the money in repairing the domestic economic situation in line with its own priorities. Secondly, the financial assistance is being routed through SBI, Male so that it does not reflect in the external borrowings of the Maldives," the Indian statement said.

“Since the principal payment is due only at the end of 10 years, it will not put any immediate debt



servicing liability other than bi-annual interest payment. Maldives is the only country to which India has provided such assistance," it added.

That India would extend the financial assistance to the Maldives was confirmed by Indian foriegn minister S Jaishankar. It is part of a concerted effort by India to ensure help to the Maldives following the outbreak of the pandemic earlier this year which has taken it toll on the movement of people across borders especially for business and tourism purposes. Tourism is a major source of revenue for the Maldivian government.

India’s moves comes as part of its “Neighbourhood First" approach which accords importance in foriegn policy to its neighbouring states in South Asia. The moves are also aimed at ensuring the atoll nation sitting astride some of the world’s busiest shipping lanes and one of its closest neighbours in the Indian Ocean region doesn’t gravitate towards New Delhi’s strategic rival China. Since the pandemic spread, India has despatched a team of doctors and specialists to the atoll nation, donated two consignments of essential medicines and another of food aid including foodgrains and onions in April- May.

"In addition, India continuously lifted export restrictions on medical consumables, respiratory apparatus, and testing kits and reagents throughout the pandemic to assist Maldives in its battle against Covid-19. India also maintained the supply of essential commodities to the Maldives despite global trade disruptions," the mission statement said.