India will provide Myanmar with $25 million for development projects including prefabricated houses in troubled Rakhine state to enable the return of Rohingya Muslims who have fled the area, the Foreign Ministry said on Thursday.
More than 600,000 Rohingya have escaped to Bangladesh after attacks by insurgents on Myanmar security forces in August triggered a military crackdown that the United Nations has called ethnic cleansing.
The international community demands the Rohingya be allowed to go home in safety, and Bangladesh and Myanmar have begun talks on repatriation, but huge doubts remain about the Rohingya ever being able to return in peace to rebuild homes and till fields.
India, which is concerned about the influx of the refugees into its territory, has stressed economic development of the Rakhine region as a way to help lower tensions.
Foreign Secretary Subrahmanyam Jaishankar held talks with Myanmar leaders on Wednesday and signed a memorandum of understanding to support development of Rakhine and help create jobs.
"This is intended to help the Government of Myanmar achieve its objective of restoration of normalcy in Rakhine State and enable the return of displaced persons," the Indian foreign ministry said in a statement.
"Under this MoU, Government of India proposes to take up, among others, a project to build prefabricated housing in Rakhine State so as to meet the immediate needs of returning people."
India will spend $25 million over the next five years on development of the impoverished region, foreign ministry spokesman Raveesh Kumar said.
Besides housing, the proposals include building schools, health care facilities and building bridges and roads.
India has been trying to promote economic cooperation with Myanmar to try to push back against China's expansive involvement in infrastructure development across south Asia.
Beijing has also stepped into the Rohingya crisis and proposed a three-phase plan including a cease-fire, bilateral talks and then tackling poverty long-term.
