Citing Chinese influence, India has signed a landmark agreement with the Central American country to implement its first Quick Impact Project (QIP) project. The agreement was signed on Wednesday in Panama City by Indian Ambassador to Panama, Costa Rica and Nicaragua Dr. Sumit Seth and Panamanian Foreign Minister Javier Martinez-Acha Vazquez.

“The Government of India will provide grant assistance for each QIP under this framework, ensuring immediate and tangible benefits to the people of Panama,” the statement from India said. The MoU aims to provide ‘tangible’ benefits to local communities in Panama by focusing on key areas such as physical infrastructure – roads and community centres – as well as social infrastructure including education, healthcare and sanitation.

This initiative demonstrates India’s proactive role in supporting global development through partnerships tailored to the needs of local communities. India has reached out to Panama in the past, including when the Indian government donated a medical assistance package to Panama for COVID-related medical assistance in 2020. India also upgraded an IT hub in the country.

“By prioritizing impactful and time-sensitive projects, the agreement reflects India’s commitment to developing strong ties with Panama and improving its socio-economic infrastructure,” India’s statement further said.

Panama’s economy is predominantly service-oriented and heavily dependent on the Panama Canal, tourist inflows, and banking transactions. India and Panama have historical ties, including the arrival of Indians to Panama in the 20th century to help build the Panama Canal.