New Delhi: India on Monday announced a $1.4 billion financial assistance package for the Maldives , a move seen as aimed at drawing the atoll nation closer into New Delhi’s sphere of influence after a period of estrangement that saw the former leadership of the Maldives leaning closer to China .

Prime Minister Narendra Modi announced the package after talks with visiting Maldivian President Ibrahim Mohamed Solih in New Delhi. Solih who arrived on Sunday, is on his first three-day visit to India, which comes a month after he was sworn into office. Solih, who was backed by the combined Maldivian opposition, defeated the former China-leaning President, Abdulla Yameen, in the 23 September elections and was sworn in on 17 November. According to news reports, the Maldives is weighed down by $3 billion in debt to China and is looking to India and Saudi Arabia, besides others, for help. Maldives owes the money to China for infrastructure projects undertaken by Chinese companies during Yameen’s tenure in office.

New Delhi, which had tense relations with Yameen over the way he dealt with his political opponents as well as the close ties he nurtured with China, is rolling out the red carpet for Solih in its bid to re-embrace Maldives.

“We held successful talks in a cordial atmosphere," Modi told reporters with Solih by his side. “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," he said.

Modi also added that both sides had agreed to ensure that they would keep other’s security interests in mind while working to consolidate their cooperation in the Indian Ocean region. “We will not allow our countries to be used for activities, which can be harmful to each other’s interests," Modi said.

On his part, Solih said the two sides agreed to strengthen maritime security cooperation in the Indian Ocean region through coordinated patrol and aerial surveillance.

According to the India-Maldives joint statement, Solih “reaffirmed his government’s ‘India-First Policy’ and commitment to working together closely with India." He appreciated Indian assistance to the Maldives and identified various areas for development cooperation, “including private sector involvement in development of housing and infrastructure, water and sewerage systems in the outlying islands, healthcare, education and tourism," it said.

Another area that the two leaders focused on was the promotion of bilateral trade and investment ties between the two countries.

Modi “welcomed the expanding opportunities for Indian companies to invest in the Maldives", according to the statement.

The prime minister noted that “the vision of the government of Maldives, of a transparent, accountable, and rule-based administration sends a welcome message to regain the confidence of Indian business persons", read the statement.

Fisheries, tourism, transportation, connectivity, health, education, information technology, new and renewable energy and communications were some of the other areas identified for cooperation, the statement added.

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