India has begun discussions to forge a Free Trade Agreement (FTA) with the Maldives, supplementing the existing South Asian Free Trade Agreement (SAFTA). Mohamed Saeed, the Maldivian Minister of Economic Development and Trade, announced these efforts at a press conference, underscoring a strategy to enhance trade facilitation and economic ties between the nations.
The push for an FTA emerges against a backdrop of heightened diplomatic tensions, highlighted by the inauguration of Maldives’ pro-China President Muizzu in November last year. His immediate call for the removal of Indian military personnel from Maldivian territory signaled a cooling of relations; the transition of these personnel to civilian roles was completed this month.
Trade dynamics between the two countries have been robust, with bilateral trade volumes climbing to new heights — exceeding $300 million in 2021 and reaching beyond $500 million in 2022, according to the Indian High Commission. This growth occurred under a 1981 trade agreement focusing on the export of essential commodities from India to the Maldives.
Saeed also met with Munu Mahawar, the Indian High Commissioner to the Maldives, to discuss reinforcing cooperative ties across various sectors, though specific details from this high-level dialogue remain undisclosed.
Historically, the Maldives has engaged in free trade agreements, such as with China under former President Abdulla Yameen Abdul Gayoom. His successor criticized this agreement, but it saw a revival with President Muizzu’s administration affirming it as a testament to strong Maldives-China relations.
The ongoing India-Maldives FTA negotiations reflect India’s strategic intent to bolster its regional influence and economic engagements amidst shifting geopolitical contours.
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