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India Extends $50 Million Budgetary Support to Maldives

India has decided to extend its budgetary support to the Maldives government by rolling over a $50 million treasury bill for another year. This move comes in response to a special request from the Maldivian government, conveyed during Foreign Minister Moosa Zameer’s visit to India last week. The State Bank of India (SBI) has agreed to continue its subscription to the $50 million Government Treasury Bill issued by the Ministry of Finance of Maldives. This arrangement, facilitated under a unique government-to-government agreement, remains interest-free, providing critical financial support to the Maldives at no additional cost.

In a statement, the High Commission of India in Male highlighted the significance of this gesture, noting that it underscores the enduring friendship and cooperative spirit between the two nations. The Maldivian government expressed its gratitude for India’s continued support. “I thank EAM @DrSJaishankar and the Government of #India for extending vital budgetary support to the Maldives with the rollover of the USD 50 million Treasury bill. This is a true gesture of goodwill which signifies the longstanding friendship between #Maldives and #India,” stated a Maldivian official. The decision to extend the Treasury bill was finalized following Foreign Minister Moosa Zameer’s official bilateral visit to India from May 8-10. During the visit, Zameer and India’s External Affairs Minister Dr. S. Jaishankar discussed various bilateral issues, including the acceleration of several ongoing infrastructure and community development projects funded by India.

India’s financial support to the Maldives extends beyond the Treasury bill. Under the Exim Bank of India’s $800 million line of credit, numerous infrastructure and connectivity projects are either completed or currently underway in the Maldives. Key projects include water and sanitation improvements on 34 islands, the Addu Development Project (including roads and land reclamation), the redevelopment of Hanimaadhoo International Airport, the expansion of Maldives Industrial Fisheries Company facilities, and the redevelopment of Gan International Airport.

In addition to these projects, in August 2022, India announced a $250 million financial assistance package for the Maldives. This was part of the Modi government’s ‘Neighbourhood First’ policy, aimed at fostering closer ties and supporting development in neighbouring countries. The package included six agreements on various areas of cooperation, such as cybersecurity and the establishment of a network of police facilities across the archipelago. Further demonstrating its commitment, India provided an additional $100 million in financial assistance in November 2022. Since 2018, India’s financial aid to the Maldives has totalled $1.4 billion, including $50 million as budgetary support, $150 million in Treasury bill subscriptions, a $400 million currency swap agreement, and significant funding for infrastructure projects under the $800 million line of credit.

This ongoing support from India plays a crucial role in the Maldives’ economic stability and development, reinforcing the strong bilateral relationship between the two countries.