Grant aid of USD 72 million from the Indian government to the Maldives has been included in the budget proposed to the Indian Parliament.
India's budget for the 2024-2025 fiscal year was submitted to the country's Parliament today by Finance Minister Nirmala Sitharaman. India's fiscal year is counted from April to March.
According to the budget, the Maldives would be the second highest recipient of grant aid from India. The highest amount of aid was proposed in the budget for Bhutan.
A total of USD 48.1 million as grant aid to the Maldives was initially allocated in the budget for the current fiscal year. But after revisions, the amount estimated to have been spent during the year increased to USD 92.9 million. India provided USD 22 million as grant aid to the Maldives during the previous year.
The decision to allocate a large amount as grant aid comes with India carrying out large-scale projects in the Maldives. Notable projects include the Thilamale' bridge project, the Hamimaadhoo International Airport project and the construction of flats in Hulhumale' by two Indian companies.
The Thilamale' bridge project was planned with USD 100 million as grant aid from the Indian government. The other projects were financed with loans from India's Exim Bank.
The formerly ruling Maldivian Democratic Party (MDP) maintained very close relations with India and pursued an "India First" foreign policy during its administration. But the current People's National Congress (PNC) government has been trying to distance the Maldives from India.
President Dr. Mohamed Muizzu made his first state visit to China instead of India and signed 20 agreements with the country. The government has also been working to reduce dependence on India in various sectors.
