Maldives Mega Connectivity Project

Context

• India on 12th October, 2020, signed a $400 million (over Rs 3,000 crore) loan pact with the Maldives for a mega connectivity project.

About

• $400 million loan pact will dwarf the Maldives-China Friendship Bridge.
• The line of credit was signed by Exim Bank’s Nirmit Ved and the Maldives Finance Minister, Ibrahim Ameer.
• India had recently completed the Supreme Court building in Mauritius, another Indian Ocean island-nation with which it has stepped up diplomatic ties.

Background

• The Maldives has received 5.5 tonnes of essential medicines from India which also helped in evacuation of Maldivians from Wuhan. India has gone the extra mile to help the Maldives financially through a transparent mechanism.
• The RBI raised Treasury Bonds which were sold to the State Bank of India (SBI), Male, for handover to the Maldives Government.

How Indo-Chinese clash has impacted India’s Stand ?

• After the Galwan Valley clash, not only has India stepped up aid but welcomed the US signing a defence framework agreement with the Maldives.
• Just seven years ago, it had strongly opposed a proposed US security partnership with the Maldives.
• The then government had felt that the American entry in the Maldives would trigger misgivings at a time when it thought India and China could co-exist in the Indian Ocean.
• Earlier, the Indira Gandhi government had kicked up a row when the US sought to renew lease on a Sri Lankan transmitter. Located in Trincomalee, New Delhi thought the CIA was using it for intelligence gathering.
• No such reservations now remain after India and China clashed in the Galwan Valley on June 15 this year.