India pledges $1.4 billion to Maldives

India pledges $1.4 billion to Maldives

Solih arrived here Sunday on a three-day state visit, his first foreign trip after assuming charge of the top office in the island nation a month ago. (Twitter/MEAIndia)

India on Monday pledged a financial assistance package of $1.4 billion to the Maldives, as the new government in the Indian Ocean archipelago sought New Delhi's help to come out of the “debt-trap” of China.

Prime Minister Narendra Modi and Maldives President Ibrahim Mohamed Solih also agreed that the two nations would strengthen cooperation to enhance maritime security in the Indian Ocean region — ostensibly to counter China.

Solih, who took over as the new president of Maldives on November 17, is currently on his maiden visit to New Delhi after succeeding Abdulla Yameen Abdul Gayoom, who allegedly pursued a policy that resulted in a drift in the island nation's relations with India and led it into a tighter embrace with China.

Yameen allowed China to go on a construction spree in the Maldives as part of the communist country's controversial Belt-and-Road initiative. His policy ended up landing the tiny nation into a debt-trap. The Maldives now owes China anything between $1.5 billion to $3.2 billion.

Modi on Monday assured Solih that India would provide a financial assistance package of up to $1.4 billion — a combination of budgetary support, currency swap and concessional lines of credit — to fulfil the socio-economic development programmes of the Maldives.

The new president of Maldives reassured the prime minister that his government would be mindful of New Delhi's “concerns and aspirations for stability in the region”. A joint statement issued after the meeting noted that the governments of India and the Maldives would “not allow their respective territories to be used for any activity inimical to the other”.

“President Solih and I agree that India and Maldives need further step up cooperation to ensure peace and stability in the Indian Ocean region. The security of the two nations are interlinked,” Modi said after his meeting with Solih.

Solih said that the two sides agreed to strengthen maritime security cooperation in the Indian Ocean region through coordinated patrol and aerial surveillance.

Modi's meeting with Solih was followed by the signing of four pacts, including an agreement on visa facilitation, which, according to the President of the Maldives, would make it easier for the people of the island nation to accompany their children when they would send them to study in schools in India. Modi noted that the new agreement would address the common concerns and help enhance the people-to-people contacts. It would also facilitate easier visa arrangements for the Maldivians to come and seek medical treatment in India.

The Maldives is one of the very few countries with which India has a visa-free arrangement.

India and Maldives also inked two Memorandums of Understanding (MoU) on Monday — one on cultural cooperation and another on establishing mutual cooperation to improve the ecosystem for agribusiness. A joint declaration of intent on cooperation in the field of Information and Communications Technology and Electronics was also signed.