India and Maldives commence negotiations on FTA
Official negotiations have commenced to establish a Free Trade Agreement between India and the Maldives, primarily aimed at reducing tariffs and fostering a more conducive environment for investment. This agreement is expected to diversify the Maldivian economy and create streamlined opportunities for exporting local products to India’s vast consumer market.
Indian Prime Minister Narendra Modi and Maldivian President Dr. Mohamed Muizzu are pictured walking together ahead of their official meeting at Hyderabad House in New Delhi, on Monday, October 7, 2024. | getty images
India and the Maldives have commenced a week-long series of negotiations aimed at establishing a Free Trade Agreement (FTA) between the two nations. According to the Indian Ministry of Commerce, the first round of talks began on Monday and is scheduled to continue through July 7. Both countries reportedly aim to officially sign the agreement before the end of this year.
India’s Ministry of Commerce has announced that the government has officially commenced the first round of negotiations for a bilateral Free Trade Agreement (FTA) with the Maldives. These virtual discussions are scheduled to take place from June 29 to July 7, 2026.
India and the Maldives are rapidly advancing efforts to establish a bilateral Free Trade Agreement (IMFTA). The Indian Ministry of Commerce and the Maldivian government have now finalized the Terms of Reference (ToR) required to define the scope of the agreement. Under this pact, primary focus will be placed on reducing tariffs and duties, streamlining trade regulations, and facilitating cross-border services and investments.
Maldivian Foreign Minister Iruthisham Adam and India’s External Affairs Minister S. Jaishankar have met to review the progress of ongoing discussions and deliberate on expediting these efforts. As the two nations mark the 60th anniversary of the establishment of diplomatic relations, both delegations agreed to further strengthen bilateral trade ties.
Alongside these trade discussions, extensive efforts are underway to strengthen the economic and financial ties between the two nations. These initiatives include the introduction of the RuPay card, the implementation of a local currency settlement system, and the integration of the Unified Payments Interface (UPI).
The Maldives' Minister of Economic Development and Trade, Mohamed Saeed, recently stated that he expects this agreement to unlock new opportunities for Maldivian businesses and further strengthen the economic ties between the two nations.
The establishment of a Free Trade Agreement (FTA) between India and the Maldives was first announced during President Dr. Mohamed Muizzu’s official visit to India in 2024. During the visit, both governments agreed to initiate formal negotiations on the matter.
Minister Saeed stated that this agreement is part of the government's policy to diversify the economy and reduce its dependence on any single sector.
India is not only one of the Maldives' largest trading partners but also one of the world's most significant consumer markets. The Minister noted that the Free Trade Agreement will pave the way for easier export of Maldivian products to one of the fastest-growing markets in the world.
The Maldives has entered into a Free Trade Agreement (FTA) with China. While the agreement is currently being implemented, it is notable that the government has yet to clearly demonstrate the benefits gained by the Maldives, given the significant trade imbalance between the two nations.
