India has proposed USD 72 million in free aid to the Maldives for the upcoming fiscal year, as per the latest budgetary allocations by the Indian Finance Ministry. This financial aid is a part of a broader fiscal plan that includes substantial allocations for several countries, extending from April this year to March of the next year.
The proposed amount for the Maldives, set at INR 600 crore (equivalent to USD 72 million), marks a decrease from the current fiscal year’s allocation, which was USD 92 million. This reduction comes amidst a changing geopolitical landscape in the region.
India’s foreign aid strategy, particularly in its neighboring countries, has seen Bhutan receiving the largest share of both free aid and loans. Bhutan’s aid for the fiscal year has been earmarked at USD 249 million, highlighting the country’s strategic importance in India’s foreign policy.
Meanwhile, the budgeted aid for the Maldives has witnessed a downturn. This comes at a time when the bilateral relations between India and the Maldives have experienced some strains. The recent political developments in the Maldives, including the change of government under President Dr Mohamed Muizzu, have led to significant shifts in the country’s foreign policy.
The decrease in India’s financial aid to the Maldives might be reflective of these recent shifts in diplomatic ties and regional politics. Nonetheless, the aid signifies continued engagement and a level of cooperation between the two nations amidst the changing dynamics of international relations in the South Asian region.