New Delhi: In a potential thaw to recent diplomatic tensions, India has initiated discussions with the Maldives to establish a Free Trade Agreement (FTA). This news comes as both nations seek to strengthen economic ties.Deepening trade relationsMaldivian Minister of Economic Development and Trade, Mohamed Saeed, confirmed ongoing discussions regarding the FTA. They [India] want there to be a Free Trade Agreement with the Maldives, in addition to the existing South Asian Free Trade Agreement (SAFTA), said Saeed at a press conference.The Maldives, led by President Mohamed Muizzu, has expressed openness to FTAs with various countries, aiming to streamline trade activities. This aligns with Indias growing economic influence in the region. Notably, bilateral trade between the two nations surpassed $300 million in 2021 and reached over $500 million in 2022, highlighting the potential benefits of an FTA.A chance to bridge the gapThe pursuit of an FTA comes amidst recent strains in India-Maldives relations. Tensions flared in November 2023 after Maldivian officials criticized Prime Minister Narendra Modis visit to Lakshadweep. Additionally, concerns arose due to President Muizzus perceived pro-China stance and the Maldives request for the withdrawal of Indian military personnel. However, Indias recent decision to extend vital budgetary support through a $50 million Treasury Bill rollover indicates a willingness to move forward.What next for India-Maldives FTAThe success of the India-Maldives FTA negotiations will depend on addressing past diplomatic issues and forging a mutually beneficial agreement. If achieved, this FTA could significantly boost trade volumes and economic cooperation between the two nations.
