With China in sight, India PM Modi announces $1.4 bln ‘bailout’ for Maldives

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India’s Prime Minister Narendra Modi on Monday announced a $1.4 billion aid for the Maldives following his meeting with President Ibrahim Mohamed Solih to bail out the island country from an economic crisis.

In first foreign trip, since assuming office of the President of Maldives, President Solih asserted that Male’ will have better ties with New Delhi and both countries will work together in various fields to strengthen the relation.

The two countries also inked four pacts, including one on visa facilitation. This was Prime Minister Modi’s second meeting with Solih. Earlier PM Modi flew to Maldives to attend the swearing in ceremony of President Solih.

“We held successful talks in a cordial atmosphere. We vowed to strengthen ties. We want greater trade ties with the Maldives. There are increasing opportunities for Indian companies in the island nation,” PM Modi said in a joint briefing with Solih after holding bilateral talks.

Solih’s three-day state visit, which got underway on Sunday, is his first overseas trip after taking over as president on November 17.

Line of credit

PM Modi said India was extending $1.4 billion as budget support, currency swap and line of credit for the social and economic development of Maldives.

In a statement aimed to counter the growing concerns of Chinese activities in the Indian ocean, PM Modi said both sides would work to further strengthen cooperation in the Indian Ocean region.

“We will not allow our countries to be used for activities which can be harmful to each other’s interests,” Modi said. Solih reiterated Maldives’ support for India’s permanent membership to United Nations Security Council.

The new engagement is critical for New Delhi as it has seen its popularity and support among its neighbors dwindling in recent years.

Experts see this as a shot in the arm for India as Maldives reaffirms faith in its “India-First” policy, especially when former Maldivian president Abdulla Yameen had shunned India to embrace China.

“Maldives has been one of the testing country for India’s neighborhood first policy owing to former President Yameen’s inclination toward China. Today marks a new shift, as President Solih prefers India,” says Prof M.K. Singh, an International Affairs expert.

“In less than three months, this is President Solih and PM Modi’s second meeting and today India’s assistance is a win-back gesture,” he added.

Military base

Meanwhile, a controversy arose over reports of and Indian army base in the Maldives, which was promptly denied by the country’s foreign minister Abdullah Shahid.

“Categorically refute media reports alleging that Govt is planning to allow establishment of an Indian military base in Maldives in exchange for financial assistance or other material benefits. It is baseless and aimed at discrediting the Govt as it starts to rebuild good,” Shahid said in a tweet.

Referring to news reports claiming that the offering of $ 1billion was a deal with a condition that Maldives government should allow Indian military presence permanently in here.

“Govt assures the people, that it will always act in the national interest of Maldives, and will not undertake any international engagement that will compromise the sovereignty and independence of the country!,” he said.