Economic Minister : Maldives and India will reach a FTA ‘soon’

NEW DELHI : The Maldives will soon finalise a trade pact with India, a senior Maldivian Minister has said, barely two weeks after New Delhi appeared to caution the island nation over possible “revenue loss” from similar deals inked with other countries, including China.

According to Maldivian media, Minister of Economic Development and Trade Mohamed Saeed confirmed the move Monday night in an interview to a local television channel. Mr. Saeed had said that President Mohamed Muizzu — during his state visit to India in October 2024 — and Prime Minister Shri Narendra Modi had “expressed keen interest” in signing the Free Trade Agreement. Official sources based in capital Male, who are familiar with the developments, told The Hindu that bilateral negotiations on the FTA are scheduled to begin soon.

He highlighted on the preferential trade agreement signed with Turkiye in November last year, and the FTA with China which took effect at the start of this year.

He said that both agreements will result in significant reductions in tariffs on Maldivian exports, with the agreement with China allowing Maldivian businesses to export 296 types of seafood products at zero tariff.

Noting Maldives’ heavy reliance on imports, Saeed said that trade agreements will reduce the country’s reliance on imports in the long run and boost its exports.“But there is an immediate need to eliminate barriers to exporting Maldivian products to international markets,” he said.

Saaed also spoke about the dangers of Maldives’ reliance on its tourism industry. He described tourism as one of the riskiest industries, with each shock to the tourism industry posing a huge risk to the Maldivian economy. Back in May last year, India said that Maldives had not proposed signing an FTA, but that the country would consider it if the country makes such a proposal. The statement had come amid strained ties between Maldives and India – ties that since appear to have been mended.