Neighbourhood First: India gives a soft loan of USD 250 million to the Maldives

By: |
September 21, 2020 5:31 PM

During the COVID-19 global pandemic, India was the first country to provide continued assistance and had dispatched a team of doctors and specialists who assisted the local authorities in the in COVID-preparedness in March.

The donation from India included 6.2 tons of medicines which were airlifted from 4 Indian cities by the Indian Air Force, and, 580 tons of food aid including foodgrains, onions, etc for the people of that country. (Credit: The Indian High Commission, the Maldives)

In response to a request made by the Maldives President Solih for financial assistance to overcome the economic crisis in his country, India on Saturday has provided USD 250 million. The Maldives is the only country to which India has provided such assistance.

This budgetary assistance from India to the government of the island nation to mitigate the economic impact of the COVID-19 pandemic was handed over by High Commissioner Sunjay Sudhir and CEO, SBI, Male Bharat Mishra to Finance Minister Ibrahim Ameer, in the presence of Foreign Minister Abdulla Shahid.

It is being provided under the most favourable terms possible to the Maldives, through a Treasury bond sale to the State Bank of India (SBI), Male and has tenure of 10 years for repayment.

India & the Maldives

During the COVID-19 global pandemic, India was the first country to provide continued assistance and had dispatched a team of doctors and specialists who assisted the local authorities in the in COVID-preparedness in March.

This was followed by India dispatching a consignment of 5.5 tons of essential medicines in April, and then in May another round of consignment was sent off to the capital of that country. The donation from India included 6.2 tons of medicines which were airlifted from 4 Indian cities by the Indian Air Force, and, 580 tons of food aid including foodgrains, onions, etc for the people of that country.

(PHOTO CREDIT: Indian High Commission, the Maldives)

In addition, throughout the pandemic, India has been lifting export restrictions on medical consumables, respiratory apparatus, and testing kits and reagents to help the Maldives in its fight against COVID-19.

So far, around 500 Maldivians patients in eight different batches have travelled to India for treatment. Again, on the request of the government of that country, India is going to send doctors and nurses who have been recruited on short-term contracts to help in reinforcing the health system there to fight COVID-10.

More about Budgetary assistance

There are no conditions attached. The government there is at liberty to use the funds to improve its domestic economic situation in line with its own priorities.

(PHOTO CREDIT: Indian High Commission, the Maldives)

This has been routed through SBI, Male. This will not reflect in its external borrowings.

India has provided a sovereign guarantee to SBI for this financial assistance, and the soft loan has a time period of 10 years with a low-interest rate. And, according to the MEA, since the principal payment is due only after 10 years there will be no immediate debt servicing liability other than bi-annual interest payment.

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