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. Saeed had said that President Mohamed Muizzu — during his state visit to India in October 2024 — and Prime Minister Narendra Modi had “expressed keen interest” in signing the Free Trade Agreement (FTA). 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.
Muizzu is focused on securing trade agreements with major global markets, ensuring that such arrangements benefit Maldivians, Saeed noted, pointing to the preferential trade agreement signed with Turkey in November 2024 and the FTA with China that came into effect on January 1, 2025. “Most of the aquatic products” originating in the Maldives exported to China will enjoy zero tariff treatment, China’s Ministry of Commerce said following the signing of the agreement.
First responder: On Maldives-India ties
Saeed’s announcement assumes significance, coming soon after New Delhi’s rare comment on a neighbour’s trade partnership choices. Addressing the weekly media briefing of the Ministry of External Affairs on January 31, 2025, spokesperson Randhir Jaiswal said: “Recent agreements that are likely to result in revenue loss for the Maldives government are obviously a matter of concern and do not bode well for the long-term fiscal stability of the country.” While he didn’t name the two countries, he flagged possible implication to India’s Maldives policy and noted: “We would, obviously, need to take that into account while framing our own policies.”
Meanwhile, Saeed said in his interview that such trade pacts would help the Maldives boost its exports and become less reliant on imports. Maldives is currently negotiating a foreign currency crisis amid low foreign reserves and high public debt. In its October 2024 update, the World Bank said the Maldives faces “heightened external and fiscal vulnerabilities” that require urgent implementation of comprehensive economic reforms.
Meera Srinivasan is the The Hindu Correspondent in Colombo