India works on lines of credit to Maldives before PM Modi's trip

New Delhi: India is working on a line of credit which could be firmed up during Prime Minister Narendra Modi's July 25-26 visit to the South Asian country which has been facing severe economic headwinds, said people familiar with the matter. During the visit, on the occasion of Maldives National Day, the PM is expected to inaugurate a slew of India-funded infrastructure and capacity building projects as part of the Modi government's 'Neighbourhood First' policy, they said.

India has extended several lines of credit to the Maldives in the past. It is also assisting the country in high impact community development projects, which are driven by the needs and priorities of the communities and government of Maldives. Till date, 56 such projects have been approved, of which 14 have been completed and inaugurated.

In May India extended support to the Maldives by rolling over the $50 million treasury bill to keep the country's economy afloat amid a looming debt crisis. Since March 2019, India has facilitated subscription of several such treasury bills by the State Bank of India and rolled them over annually, interest-free, to the government of Maldives. This forms part of the government-to-government arrangement between the two nations that serves as India's emergency financial assistance to its maritime neighbour.