Myanmar leaders welcomed the proposal during his first state visit that ended on Wednesday, according to a joint statement posted on the website of India’s Ministry of External Affairs.
India offered the assistance under the Rakhine State Development Programme and the two sides agreed “to finalise the implementation modalities within the next few months”.
About 164,000 new Rohingya people from the state have entered Bangladesh since the latest violence began on Aug 25.
During his visit, Modi held bilateral talks with the Myanmar delegation led by State Counsellor Aung San Suu Kyi.
Both the sides shared the view that the recommendations of the Advisory Commission on the Rakhine state led by Kofi Annan needed to be implemented.
The problem leading to the refugee crisis has a long term implication, including for India.
According to the joint statement, the two sides shared the view that the situation in Rakhine State had a “developmental as well as a security dimension”.
Both sides also agreed that the solution lies in development of Rakhine State and all its communities.
In particular, there was agreement to bring about overall socio-economic development in the State by undertaking both infrastructure and socio-economic projects.
Those include education, health, agriculture and allied activities, agro-processing, community development, construction of small bridges, upgradation of roads, small power projects, livelihood activity, setting up of training centres, promotion of household crafts, conservation of environment and cultural heritage.