Indian foreign minister S Jaishankar on Thursday, August 13, said that India will finance a major connectivity project in the Maldives through a $400 million line of credit and $100 million grant after talks held during a meeting through video conference with his Maldivian counterpart Abdulla Shahid.
The interaction was a part of regular high-level exchanges between India and the Maldives. It provided an opportunity to take stock of bilateral relations and make some landmark announcements in the context of COVID-19 and the overall bilateral partnership.
The Ministers have reviewed the state of time-tested relations between India and the Maldives, and noted with satisfaction that the COVID-19 pandemic has not been able to slow down the pace of bilateral cooperation. EAM also conveyed the greetings of the people and the Government of India to the people and the Government of Maldives, and assured the Government of President Solih that India stood by its close maritime neighbour and friend in difficult times.
EAM expressed happiness that India and Maldives worked very closely in dealing with the COVID-19 pandemic, and that the Maldives is the largest beneficiary of Indian COVID-19-related assistance among neighbouring countries. EAM reaffirmed India’s continued commitment for all possible support to the Maldives for minimising the health and economic impact of the pandemic. EAM and Foreign Minister Shahid emphasized that greater connectivity results in prosperity.
EAM made the following announcements:
(i) Greater Malé Connectivity Project (GMCP):
Responding to a request from the Government of Maldives, EAM announced the Government of India’s decision to support the implementation of GMCP in Maldives, through a financial package consisting of a grant of USD 100 million and a new Line of Credit of USD 400 million. EAM noted that this will be the largest civilian infrastructure project in Maldives, connecting Malé (the capital of Maldives) with three neighbouring islands – Villingili, Gulhifahu (where a port is being built under Indian LoC) and Thilafushi (new industrial zone) – by construction of a bridge-and-causeway link spanning 6.7 kms. Once completed, this landmark project will streamline connectivity between the 4 islands, thereby boosting economic activity, generating employment and promoting holistic urban development in the Malé region.
(ii) Start of direct cargo ferry service between India and Maldives: Recalling Prime Minister of India’s announcement in the Majlis in June 2019 to start a ferry service between India and Maldives, EAM announced that a direct cargo ferry service will commence shortly. EAM underscored the significance of this service in enhancing bilateral trade and connectivity and in further boosting the economic partnership between the two countries. The cargo ferry service will enhance sea connectivity and provide predictability in supplies for importers in Maldives and exporters in India. It will also reduce logistics costs and times for traders.
(iii) Creation of an Air Travel Bubble: EAM announced the creation of an air travel bubble between India and Maldives to facilitate the movement of people from both sides for employment, tourism, medical emergencies etc. In keeping with our special ties, Maldives is the first neighboring country with which an air bubble is being operationalized. The air bubble symbolizes India’s support to shore up tourism arrivals and revenues in the Maldives. Health protocols in both countries will be strictly followed. The first flight under the Air Bubble is expected to commence on August 18.
(iv) Supply of essential commodities to Maldives: Fulfilling India’s commitment under the bilateral Trade Agreement of 1981, EAM conveyed the decision to renew quotas for supply of essential commodities to Maldives for the year 2020-21. The commodities include food items like potatoes, onions, rice, wheat, flour, sugar, dal and eggs as well as river sand and stone aggregates. The quotas assure food security, and the supply of essential construction items, and thereby provide certainty and price stability for such essential items in the Maldives.
During COVID-19 pandemic, when supply chains got disrupted, India continued to support the supply of essential food and construction materials to Maldives. In May 2020, India had also gifted 580 tons of essential food items through Mission SAGAR.
(v) Extension of urgent financial assistance: Given the financial challenges faced by Maldives due to the COVID-19 situation and India’s commitment to assist Maldives in its economic recovery, EAM announced that Government of India has decided to extend in-principle urgent financial assistance to the Government of Maldives, by way of a soft loan arrangement. Exact modalities of the loan arrangement are being finalized by the two sides.
Foreign Minister Shahid expressed deep appreciation for the steps taken by the Indian Government in meeting the development priorities of his Government. He noted that the Greater Malé Connectivity project will be a new milestone in India- Maldives ties and will anchor the economic and industrial transformation of the Maldives. Foreign Minister Shahid conveyed gratitude for the timely financial assistance of USD 250 million being extended by India. He noted that this financial support will help in revival of the Maldivian economy which is grappling with the impact of the Covid-19 crisis.
Foreign Minister Shahid welcomed the decision to create an air bubble and a direct cargo ferry service between India and Maldives. Both these steps will further strengthen bilateral trade and the close people-to-people relations between the two countries which forms the bedrock of our dynamic partnership.
Since November 2018, under the leadership of Prime Minister Shri Narendra Modi and President Ibrahim Mohamed Solih, India and Maldives have embarked on a dynamic and ambitious phase of the partnership that builds on our enduring ties based on mutual trust and shared interests. The ‘Neighbourhood First’ foreign policy of India and the ‘India First’ policy of Maldives complement each other and now demonstrate concrete outcomes. PM Modi and President Solih have met four times in the last one and-a-half years. President Solih is likely to visit India later this year, subject to the Covid-19 related conditions.
EAM Jaishankar and Foreign Minister Abdulla Shahid expressed satisfaction at the progress that has been achieved in the implementation of bilateral projects and initiatives, especially those under the USD 800 million Line of Credit. Both leaders agreed to continue to work closely together so that bilateral relations continue to be broadened and deepened.