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Indian prime minister announces US$1.4 billion assistance to Maldives

The funds were pledged as budget support, currency swap agreements and concessional lines of credit.



India will grant the Maldives US$1.4 million in budget support, currency swap agreements and concessional lines of credit, Prime Minister Narendra Modi announced at a joint press briefing Monday after welcoming President Ibrahim Mohamed Solih on his maiden state visit.

An agreement on visa arrangements and Memoranda of Understanding on cultural cooperation and improving ecosystems for agribusiness were also exchanged following high-level discussions at Hyderabad House.

The agreement eases the process of obtaining dependent and medical visas and facilitates a 90-day visa for Maldivians travelling for tourism or business purposes.

As his first port of call since assuming office on November 17, President Solih’s official visit to India has been hailed as the beginning of a “new era” of diplomatic relations with the giant neighbour.

Historically close ties were strained under former president Abdulla Yameen, who forged a partnership with India’s rival China and secured financing for flagship infrastructure projects, stoking fears in New Delhi of loss of influence and possible military bases in its backyard.

“We will not allow our countries to be used for activities which can be harmful to each other’s interests,” Modi said in his press statement Monday.

“An important aspect of our discussions was our mutual aspiration and need for regional stability,” echoed Solih, adding that the two sides agreed to strengthen maritime security cooperation in the Indian Ocean region through coordinated patrolling, aerial surveillance and exchange of information.

The Maldives would also support India’s candidature for permanent membership on an expanded UN security council, he pledged.

On Sunday evening, President Solih met with members of the Indian business community and invited investments in the Maldives. He also attended an interactive session with select CEOs of Indian companies.

In his speech, the president “pointed out that the Maldives has near perfect capital mobility and underscored that the Maldives’ business environment did not present any obstacles to foreign ownership of investment.”

Declaring the country open for business, Solih added: “India is our closest neighbour and our people have ties of friendship and cultural affinity and within those close links trade and commerce have flourished. India is not only our closest friend, it is also one of our largest trading partners.”

The president and first lady were hosted at Rashtrapati Bhavan mansion as a guest of the Indian president.