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India Granted USD 500 mn Aid for Maldives Connectivity Project & USD 250 mn as Budgetary Support

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India announces USD 500 million help in Maldives Connectivity projectOn August 14, 2020, India has granted a US$250 million as budgetary support and US$500 million for the 6.7 Km Greater Male Connectivity Project (GMCP) during a virtual conversation between India’s Union Minister of External Affairs Subrahmanyam Jaishankar and Maldivian Counterpart Abdulla Shahid.

  • The financial package of US$250 million will support the Maldives in meeting the Government’s financing gap, and support its efforts in responding to Covid19. 
  • While the financial package of US$500 million consist of a grant of US$100 million and a new Line of Credit (LoC) of US$400 million. The US$400 million LoC comes in addition to a previous LoC of US$800 million that was announced by India in December 2018. 

Key Points:

-The GMCP will be the largest civilian infrastructure project in Maldives, connecting its capital city Male with three neighbouring islands viz. Villingili, Gulhifahu and Thilafushi.  It will boost economic activity, generate employment and promote holistic urban development in the Male region.

-India has also decided to start air travel bubble with Maldives to facilitate movement of people from both sides for employment, tourism, medical emergencies. 

  • Maldives is the first neighbouring country with which an air bubble is being operationalized by India which is expected to commence on August 18, 2020.

-India also decided to renew quotas for supply of essential commodities to Maldives for the year 2020-21 which include food items like potatoes, onions, rice, wheat, flour, sugar, dal and eggs as well as river sand and stone aggregates. 

Points to be noted:

-India supported Maldives amid COVID-19 by supplying essential food and construction materials to Maldives. In May 2020, India had also gifted 580 tons of essential food items through Mission Security and Growth for All in the Region (SAGAR).

-On 1 November 2020, the Maldives and India will celebrate 55 years since the establishment of formal diplomatic relations between the two countries.

-The growing relationship between both nations is premised upon the ‘India First’ policy of Maldives and ‘Neighbourhood First’ policy of India.

-At present, India-assisted projects in the region include water and sewerage projects on 34 islands, reclamation projects for the Addl island, a port on Gulhifalhu, airport redevelopment at Hanimaadhoo, and a hospital and a cricket stadium in Hulhumale.

Recent Related News:

On July 20, 2020, the Government of India (GoI) has signed an agreement with Ministry of Health of Maldives for the establishment of ‘Emergency Medical Services Unit’ at Baa Atoll Dharavandhoo Hospital in Male.The project would cost MVR (Maldivian rufiyaa) 8.5 million (Approximately Rs 4,14,58,782) out of which MVR 7.5 million (Approximately Rs 3,64,03,786) is grant from India. It will be constructed by LF Construction Pvt Ltd of Maldives.

About Maldives:
Capital– Male
Currency– Maldivian rufiyaa
President– Ibrahim Mohamed Solih