While relations between India and the Maldives worsened due to reported diplomatic tensions, the latter is now attempting to establish an FTA with its neighbor.
Speaking at a press conference in Male, Minister of Economic Development and Trade Mohamed Saeed disclosed that recently, India has evinced interest in a preferential trade agreement that would enhance the existing SAFTA.
In addition, Saeed said that, according to PTI news agency, they want India to want a Free Trade Agreement with the Maldives and SAFTA.
It is noted that Maldivian President Mohamed Muizzu has now allowed all countries to negotiate a free trade agreement with the Maldives’ island nation. The government is trying to make such agreements with as many countries as possible to promote free trade activities.
The reported attempt to find a free trade agreement with the Maldives follows the severed diplomatic relations between the two countries since November 2018. This diplomatic problem emerged after several ministers in the Maldives made fun of Modi’s visit to Lakshadweep, while Muizzu favors China siding and asking Indian forces to leave their country.
However, it is important to realize that despite the diplomatic problems, there are still continuous business relations between the two countries. According to the records of the Indian High Commission, bilateral trade for the year 2021 reached $300 million for the first time in history, and in the subsequent year, the value stormed over $500 million.
In May, India also widely reciprocated this move, extending the rollover of a $50 million Treasury Bill for another year on special request of the Maldivian government, which provides much-needed budgetary support to the island nation.
The ongoing diplomatic exchanges add further to the outlook that an FTA between India and the Maldives can bring about a new cooperation dimension in the two countries’ bilateral economic relations.
