NEW DELHI -- India will provide a $1.4 billion line of credit to the Maldives, Prime Minister Narendra Modi announced Monday at a summit meeting here with the small island nation's new leader.
Maldivian President Ibrahim Mohamed Solih chose New Delhi for his first official trip abroad since taking office a month ago in a clear sign of leaning toward his giant neighbor and away from the pro-Chinese line of his predecessor.
"We will offer the Maldives budget support, currency swap," Modi said in a news conference following the meeting. "We will offer $1.4 billion as economic assistance and development [aid]."
The two leaders also discussed easing visa rules to increase human exchanges and cooperation in information technology.
Under former President Abdulla Yameen, whom Solih defeated in the September election, the Maldives took on large debts to China -- which is pushing its Belt and Road initiative all over Asia -- to build bridges, homes and other infrastructure. India, alarmed by China's growing influence in the Indian Ocean region, appears eager to bring the Maldives back under its wing by helping the new government repay the Chinese.
"President Solih and I agreed to maintain peace and security in the Indian Ocean region, and we need to strengthen our relationship even more," Modi said. "We will not use our respective countries for any activity that may cause harm to the other," he added, without naming China.
Sri Lanka, another one of India's neighbors, has given up control of a port in the southern district of Hambantota to the Chinese in exchange for debt relief. India is anxious to prevent a similar development in the Maldives.
The Maldives' debt to China has reached $3 billion, says former President Mohamed Nasheed, co-founder of Solih's Maldivian Democratic Party. The country is unable to pay back that sum on its own, he has said in an interview with the Nikkei Asian Review.
In November, the Nikkei Asian Review reported that India was considering providing up to $1 billion in loans to the Maldives. The even larger credit line shows that Maldives' financial condition demands greater help.
"Maldives' treasury is almost empty, and they are struggling even to find funds for government officials' salaries," said a source from India's Ministry of External Affairs. The aid from India is expected to fund both administrative operations and debt repayment to China.