India to provide $1.4bn financial assistance to Maldives

India will provide a financial assistance of $1.4 billion to the Maldives, Prime Minister Narendra Modi said on Monday during a press conference with the visiting president of the South Asian archipelago.

"For Maldives' social and economic development we are providing a financial assistance of $1.4 billion in the form of budgetary support, currency swap agreements and concessional lines of credit," Modi said.

Mohammed Ibrahim Solih, who won a surprise election in September, is trying to reset ties with regional power India after the previous president drew the Maldives closer to China.

Modi had attended Solih’s swearing-in ceremony on November 17.

The new president of the Maldives called India the island nation’s “closest friend,” welcome words for New Delhi after years of growing economic influence by Beijing.

President Ibrahim Mohamed Solih spoke Sunday in New Delhi, on his first overseas trip since his election. In September, he defeated strongman Yameen Abdul Gayoom, who had forged increasingly closer ties to China during his five years in office.

Earlier, External Affairs Minister Sushma Swaraj called on Solih and discussed bilateral and regional issues of mutual interests.

Relations between India and the Maldives deteriorated after then-president Abdulla Yameen imposed emergency on February 5 this year.

India had criticised his decision and asked his government to restore the credibility of the electoral and political process by releasing political prisoners. The emergency lasted for 45 days.