India is helping Maldives in its largest ever connectivity project to link capital Male with 4 islands

India will provide Maldives a financial package, consisting of a grant of US$100 million and Line of Credit of worth US$400 million for the island country’s Greater Male Connectivity Project (GMCP). India also announced providing a budgetary support of US$250 million to Maldives, facing a crisis due to the Covid-19 situation.

This was declared by External Affairs Minister S Jaishankar during his talks with Maldivian counterpart Abdulla Shahid through video conferencing on Thursday.

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-km

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.

During the talks, Jaishankar also announced that a direct cargo ferry service between India and Maldives will commence shortly.

In June 2019, Prime Minister Narendra Modi during his visit to Male, had announced the start of cargo ferry service between the two countries.

S Jaishankar 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,” Jaishankar said.

The EAM also announced creation of an air travel bubble between India and Maldives to facilitate movement of people from both sides for employment, tourism, medical emergencies and others.

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.

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.

Given the financial challenges faced by Maldives due to the COVID-19 situation and India’s commitment to assist Maldives in its economic recovery the EAM announced that the 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.

As per the Ministry of External Affairs, Maldivian 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 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 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.

As per the MEA, both sides expressed satisfaction at the progress that has been achieved in the implementation of bilateral projects and initiatives, especially those under the US$800 million Line of Credit. The two Ministers also agreed to continue to work closely together so that bilateral relations continue to be broadened and deepened.