Indian Prime Minister Narendra Modi agreed on Thursday to loan the Russian government $1 billion for the development of its far east territories.

Addressing the Plenary Session of 5th Eastern Economic Forum in Vladivostok, Modi said the funding “will not only strengthen the efforts for human welfare in the Far East, but also the entire mankind.”

“For the development of the Far East, India will give a line of credit worth USD 1 billion,” he said. “My government has actively engaged in East Asia as part of its ‘Act East’ policy. This will also give a new dimension to our economic diplomacy.”

“Let us deepen the bond between India and Russia even further. India is proud of the achievements of the Indian diaspora,” he continued. “I am sure here in the Russian Far East too the Indian diaspora will make an active contribution towards the region’s progress. India is a proud and active participant in the various activities of the Eastern Economic Forum. Participation has come from the top levels of government and industry.”

Despite its hostile climate, the Russian Far East is rich in a variety of natural resources, including oil, natural gas, timber, gold, and diamonds. The world’s superpowers, including China and the United States, have long been competing for the upper hand over the region, which shares borders with China, Mongolia, and North Korea, as well as a maritime border with Japan. On its own, it is the eighth largest landmass in the world, despite being the fourth least densely populated country.

During his two-day visit, Modi also announced the creation of a sea link between Vladivostok and the Indian city of Chennai, aimed at reducing the transport time from 40 days to 24 days. An agreement for Vladivostok-Chennai sea link was first reached last year when late Foreign Minister Sushma Swaraj visited Russia to discuss the issue.

In his address, Modi added that the investment and strengthening of ties would help consolidate ties based on the principles of “rules-based order, sovereignty, respect for territorial integrity and is against engaging in the internal matters of other countries.”

Relations between Russia and India have strengthened considerably in recent years, with Modi describing Putin as a “close friend,” adding they share a “special chemistry” together. “With each meeting with President Putin, we get closer and our relationship grows,” Modi told the local newspaper Rossiyskaya Gazeta.

Putin has praised his “great friend, Mr. Modi” and hailed him as “our strategic partner.”

Following his election victory earlier this year, Putin even awarded Modi the Order of St. Andrew, the highest civilian award offered by the Russian Federation, for his provision of “exceptional services in promoting a special and privileged strategic partnership between Russia and India.” Previous foreign recipients of the award include Chinese Communist Party leader Xi Jinping, Kazakhstan’s President Nursultan Nazarbayev, and Azerbaijan’s President Geydar Aliev.