India has not proposed a free trade agreement with the Maldives, but is open to it: MEA

New Delhi

India has not made any proposal to conclude a free trade agreement (FTA) with the Maldives, but will “certainly” explore the possibility of the island state considering such an agreement, the Indian Ministry of External Affairs (MEA) said on Thursday.

  • Also read:Department of Commerce refines strategy for free trade agreements

“We have seen some reports that the Maldivian Commerce Minister has spoken of us (India) offering a free trade agreement. We have not done that. But if the Maldives wants to make (a proposal)… if they are considering a free trade agreement with us, we will certainly look at it,” MEA spokesperson Randhir Jaiswal said in response to a question.

Last week, Mohamed Saeed, Maldivian Minister for Economic Development and Trade, was quoted in media reports as saying that India has initiated efforts to sign a free trade agreement with the Maldives. Saeed further said that the government wants to sign such agreements with as many countries as possible to improve its trade prospects.

Free Trade Agreement between India and SAARC

India had signed a free trade agreement with all SAARC members, including the Maldives, in 2004, but does not have a separate pact with this country.

The interest expressed by both countries in negotiating a free trade agreement is significant given that diplomatic relations between the two countries came under severe strain after Maldivian President Mohamed Muizzu insisted on the withdrawal of Indian military personnel from the archipelago soon after taking office in November last year. Muizzu is widely perceived as a pro-China leader who may want to reduce India's traditional influence in the Maldives.

Despite the fragile relations, India decided to extend budget support to the Maldivian government earlier this month. At the special request of the Maldivian government, India extended a $50 million treasury bill for another year. Maldivian Foreign Minister Moosa Zameer welcomed the move, calling it a “true goodwill gesture.”

  • Also read:Ministry of Commerce discusses the formulation of standard procedures for negotiating free trade agreements

India and the Maldives signed a trade agreement in 1981, providing for the export of essential commodities. From humble beginnings, bilateral trade between India and the Maldives reached nearly $1 billion in 2023-24, with India's exports at $892 million and imports at $86.84 million.