📷 Image Credits: The Times of India
In recent developments, the Ministry of External Affairs (MEA) of India has categorically rejected claims made by Maldives’ Minister of Economic Development and Trade, Mohamed Saeed, regarding a proposed Free Trade Agreement (FTA) between the two countries. The MEA clarified that the Indian government has not put forth any formal proposal for a bilateral FTA with the Maldives.
This statement from the MEA spokesperson, Randhir Jaiswal, came in response to reports circulating in the media indicating that India was actively seeking an FTA with the Maldives. Jaiswal affirmed during a weekly briefing that there has been no specific proposal from India for such an agreement. However, he mentioned that if the Maldives expressed interest in pursuing an FTA, India would consider the possibility.
The discussion on the proposed FTA between India and the Maldives stems from remarks made by Minister Mohamed Saeed, who indicated that India was keen on establishing an FTA with the Maldives in addition to the existing South Asian Free Trade Agreement (SAFTA). Saeed highlighted that the Maldives president had extended the opportunity for FTAs to all countries, aiming to enhance trade activities.
Despite the absence of a formal FTA, bilateral trade between India and the Maldives has flourished over the years. The 1981 India-Maldives trade agreement has facilitated the export of essential commodities between the two nations. Records from the Indian High Commission reveal that bilateral trade exceeded USD 300 million in 2021 and surged past USD 500 million in 2022.
It is noteworthy that the Maldives previously signed an FTA with China, but the agreement faced criticism and was not upheld by the succeeding administration. However, under the current leadership of President Muizzu, the FTA with China has gained traction once again, symbolizing the close ties between the Maldives and China.
In a show of goodwill towards the Maldives, India recently extended crucial budgetary support by rolling over a US$50 million Treasury Bill for an additional year at the request of the Maldivian government. This gesture underscores India’s commitment to promoting economic cooperation and stability in the region.
The rejection by the MEA of the proposed FTA with the Maldives sheds light on the intricacies of diplomatic relations and trade dynamics between the two countries. As the situation continues to evolve, it remains to be seen how India and the Maldives will navigate their economic ties in the future.
