India announces $500-million package for connectivity project, creation of air travel bubble with Maldives

New Delhi [India], August 14 : India on Thursday announced a USD 500 million-package to the Maldives for the largest connectivity project in the island nation to connect Male with three neighbouring islands.
New Delhi 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.
These 'landmark' announcements were made during a meeting between External Affairs Minister S Jaishankar and his Maldivian counterpart Abdullah Shahid. The interaction which took place through video conference on Thursday was part of regular high-level exchanges between India and Maldives, according to a statement by the Ministry of External Affairs (MEA).
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.
During the meeting, Jaishankar assured the Maldives government that India stood by its close maritime neighbour and friend in difficult times.
Jaishankar made the five announcements including a start of a direct cargo ferry service between India and Maldives and India's decision 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.
Jaishankar noted that this will be the largest civilian 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.
"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.
In a bid to enhance enhancing bilateral trade and connectivity, Jaishankar also announced that a direct cargo ferry service between India and Maldives will commence shorty.
"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.
Announcing a creation of Air Travel Bubble, Jaishankar said the Maldives is the first neighbouring country with which an Air bubble is being operationalised to facilitate the movement of people from both sides for employment, tourism, medical emergencies etc.
"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.
Fulfilling India's commitment under the bilateral Trade Agreement of 1981, Jaishankar conveyed the decision to renew quotas for supply of essential commodities including food items like potatoes, onions, rice, wheat, flour, sugar, dal and eggs as well as river sand and stone aggregates to the Maldives for the year 2020-21.
"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," 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.
Exact modalities of the loan arrangement are being finalised by the two sides, the statement noted.
Expressing a deep appreciation for the steps taken by the Indian Government in meeting the development priorities of his Government, Maldives foreign minister Shahid noted that GMCP will be a new milestone in India- Maldives ties and will anchor the economic and industrial transformation of the Maldives.
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, according to the statement.
He also 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.
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. 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.
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.