‘No proposal made’: MEA rejects Maldives minister's claim on FTA

NEW DELHI: The ministry of external affairs (MEA) on Thursday said that no formal proposal for a bilateral free trade agreement (FTA) with the Maldives has been made by the government of India. This follows remarks by Maldives' minister who said that India has shown interest in creating an FTA with the Maldives.

MEA spokesperson Randhir Jaiswal said, "No specific proposal for a bilateral FTA with the Maldives has been made by the government of India. If the government of Maldives expresses interest in having an FTA with India, we will give it due consideration."

Maldives’ minister of economic development and trade Mohamed Saeed had earlier said that India has expressed desire to complement the existing South Asian Free Trade Agreement (SAFTA) with a bilateral FTA.

Saeed noted that the Maldives president has extended the opportunity for FTAs to all countries, aiming to facilitate trade activities.

The statement comes in the backdrop of diplomatic tensions since November last year, following the inauguration of President Muizzu, who has pro-China leanings. Shortly after his inauguration, President Muizzu demanded the withdrawal of Indian military personnel from the Maldives, which was completed earlier this month.

Despite the absence of an FTA, the 1981 India-Maldives trade agreement enables the export of essential commodities. Bilateral trade between India and the Maldives surpassed USD 300 million in 2021 and exceeded USD 500 million in 2022, according to the Indian High Commission.

The Maldives previously entered into an FTA with China during president Abdulla Yameen Abdul Gayoom's administration, which was later criticized and not honored by his successor, President Ibrahim Mohamed Solih. The FTA with China has regained momentum since President Muizzu took office, with the current administration expressing readiness to honor the agreement, viewing it as a symbol of strong relations between the Maldives and China.

(With agency inputs)
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