India to fund key projects in Maldives to counter China

Photo: India’s external affairs minister Dr Jaishankar interacting with his Maldives counterpart through video conferencing today.

By Amit Agnihotri

New Delhi: In order to counter China’s influence in the strategic Indian Ocean Region, India today announced a slew of projects in Maldives to deepen its relations with the maritime neighbour.

The relationship was not cosy till two years ago. Former Maldives President Abdullah Yameen had asked India to take back the two navy and coast guard helicopters gifted a few years ago, and refused to extend visas of Indian military personnel attending them, worrying New Delhi.

President Abdullah Yameen was China’s protégé. As Chinese funds worth millions of dollars flowed in, democracy was pushed behind under him and Maldives came in the grip of the Asian dragon’s debt-trap diplomacy.

Beijing is interested in Maldives, as it is located along China’s shipping route to West Asia. In 2014, Chinese President Xi Jinping had said Maldives could become a part of the maritime ‘Silk Road‘, another form of the Belt and Road Initiative. In August 2018, three Chinese naval ships docked in Male, causing concern in New Delhi.

India, which has had age-old ties with Maldives, has quickly moved in to save the day for the island nation since a change of government brought in President Ibrahim Mohamed Solih to power in Nov. 2018.

Since then, India and Maldives have embarked on a dynamic and ambitious phase of the partnership, based on mutual trust and shared interests under India Prime Minister Narendra Modi and Solih.

The two leaders have met four times in the past one-and-a-half years and Solih is likely to visit India later this year, subject to COVID-19 situation improving.

The ‘Neighbourhood First’ policy of India and the ‘India First’ policy of Maldives complement each other and are now showing concrete outcomes.

The reach out announced today includes a mega urban development project in Maldives’ capital Male, a direct ferry service between the two countries to boost trade and movement of people, a system to facilitate air travel during the COVID-19 pandemic, and supply of essential items besides soft loans.

“India wants to assure President Solih that the country stands by its close maritime neighbour and friend in difficult times,” India’s Minister of External Affairs Dr S. Jaishankar told Foreign Minister of Maldives Abdulla Shahid in a virtual meeting.

The interaction was a part of regular high-level exchange between India and Maldives, which is the largest beneficiary of Indian COVID-19 related assistance among the neighbouring countries.

As part of the deal, India will support the Greater Malé Connectivity Project through a financial package consisting of a grant of $100 million and a new Line of Credit worth $400 million.

The connectivity project will be the largest civilian infrastructure project in Maldives connecting Malé with three neighbouring islands — Villingili, Gulhifahu (where a port is being built under Indian Line of Credit) and Thilafushi (new industrial zone) through a 6.7-km bridge-and-causeway link.

Once completed, the landmark project will streamline connectivity between the four islands and boost economic activity, generate employment and promote holistic urban development in the Malé region.

The direct cargo ferry service between India and Maldives was announced by Modi when he visited the neighbouring country in June 2019 and the service is expected to be started shortly.

“The 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,” said Dr Jaishankar.

With the creation of an Air Travel Bubble between the two countries to facilitate movement of people from both sides for employment, tourism and medical emergencies, Maldives has become the first neighbouring country where the South Asian giant has operationalised such a service.

The air bubble symbolises India’s support to shore up tourism arrivals and revenues in the Maldives and health protocols in both the countries will be strictly followed. The first flight under the system is expected to commence on Aug. 18.

Fulfilling India’s commitment under the bilateral Trade Agreement of 1981, Dr Jaishankar told his Maldivian counterpart that the South Asian country will renew quotas for supply of essential commodities for 2020-21. The quotas assure food security and supply of essential construction items and provide certainty and price stability in the Maldives.

During COVID-19 pandemic, India continued to supply essential food and construction materials to Maldives. In May 2020, India had gifted 580 tons of essential food items through its ‘Mission SAGAR‘ to the neighbour.

India will also extend in-principle urgent financial assistance to Maldives through a soft loan, modalities for which are being finalised.

Shahid welcomed India’s decision to create an air bubble and a direct cargo ferry service between the two countries. The two foreign ministers expressed satisfaction at the progress in the implementation of bilateral projects and initiatives under the earlier $800-million Line of Credit.

NOTE: Defence.Capital is available on Telegram. Please click here to subscribe

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.