New Delhi: India and the Maldives are in the initial stages of crafting a Free Trade Agreement (FTA), as confirmed by Maldivian Minister Mohamed Saeed during a press conference in Male. Saeed, who oversees Economic Development and Trade in the Maldives, disclosed ongoing discussions surrounding the FTA.
Expressing India's interest, Saeed mentioned India's desire for an FTA alongside the existing South Asian Free Trade Agreement (SAFTA). The Maldives' President, Mohamed Muizzu, has extended the offer of a free trade deal to all nations, aiming to enhance trade facilitation through multiple agreements.
This endeavor to secure an FTA with the Maldives emerges against a backdrop of strained diplomatic relations since November last year. Tensions escalated following disparaging remarks by several Maldivian ministers regarding Indian Prime Minister Narendra Modi's visit to Lakshadweep. The online altercation coincided with Muizzu's pro-China stance and directives for Indian troops to depart from the Maldives.
Earlier this month, the last of the Indian military personnel transitioned to civilian roles. Despite these diplomatic challenges, bilateral trade between India and the Maldives has flourished under the 1981 trade agreement, enabling the export of essential commodities. Records from the Indian High Commission reveal a significant surge in bilateral trade, surpassing $300 million in 2021 and exceeding $500 million the following year.
In a gesture of goodwill amidst the diplomatic tensions, India announced in May its decision to extend crucial financial support to the Maldivian government. This support includes the rollover of a $50 million Treasury Bill for an additional year, responding to a special request from the Maldives government.
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