India announces largest infra project worth USD 500 million, cargo service in Maldives

An air travel bubble between the two countries will become operational from August 18.

India announces largest infra project worth USD 500 million, cargo service in Maldives
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NEW DELHI: With focus on greater connectivity, India on Thursday (August 13) announced a USD 500 million-package to the Maldives to connect Male with three neighbouring islands. It also announced the creation of an air travel bubble between India and the Maldives. 

The first flight under the Air Bubble is expected to commence on August 18. 

External Affairs Minister S Jaishankar, after a meeting with his counterpart Abdullah Shahid on Thursday via video conference, announced the creation of air bubble with the Maldives to facilitate movement of people from both sides for employment, tourism, medical emergencies among others. The two ministers reviewed the state of 'time-tested' relations between India and the Maldives and noted with satisfaction that the COVID-19 pandemic has not been able to slow down the pace of bilateral cooperation.

He said that this will be the highest ivilian infrastructure project in the Maldives, connecting Male with three neighbouring islands - Villingili, Gulhifahu and Thilafushi (new industrial zone) - by the construction of a bridge-and-causeway link spanning 6.7 km. He also announced that a direct cargo ferry service between India and Maldives will commence shorty to support the Greater Male Connectivity Project (GMCP) in the Maldives through a financial package consisting of a grant of USD 100 million and a new Line of Credit of USD 400 million.

"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 Male region," the MEA statement read.

Maldives is the first neighbouring country with which an Air bubble is being operationalised to facilitate the movement of people, said the government. 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," it read.

EAM 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, the statement read.

Jaishankar also announced that the Indian government has decided to extend in-principle urgent financial assistance to the Maldives government, by way of a soft loan arrangement.

The MEA said that since November 2018, under the leadership of Prime Minister Narendra Modi and President Ibrahim Mohamed Solih, New Delhi and Male 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. Jaishankar and Foreign Minister Abdulla Shahid expressed satisfaction at the progress that has been achieved in the implementation of bilateral projects and initiatives, especially those under the USD 800 million Line of Credit. Both leaders agreed to continue to work closely together so that bilateral relations continue to be broadened and deepened, the statement noted.