Grant aid from the Indian government to the Maldives for the next fiscal year has been reduced.
India's budget for 2024-2025 was passed yesterday. India's fiscal year is counted from April to March.
The budget submitted to India's Parliament on February 1 allocated USD 72 million as aid to the Maldives. But the budget was passed yesterday with aid to the Maldives slashed to USD 48 million.
According to the initial budget proposed to the Indian Parliament, the Maldives would have been the second highest recipient of grant aid from India. India will provide the highest amount of aid over the coming year to Bhutan and Nepal.
A total of USD 48.1 million as grant aid to the Maldives had been initially allocated in the budget for the previous 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 in the year before.
The reduction in 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 decision to reduce grant aid comes in spite of efforts by the Maldivian government to improve diplomatic relations with India.
After a diplomatic row with India during the early days of the government was resolved, President Dr. Mohamed Muizzu said on June 11 that the Maldives will benefit more than before through close ties with India. He made the remarks during a visit to attend the swearing-in ceremony of Prime Minister Narendra Modi.
During the trip, the President also met with former Indian External Affairs Minister Dr. S Jaishankar. Upon his return, he met with Indian Ambassador Munu Mahawar to discuss improving ties, speeding up projects and increasing Indian aid.
