India Denies Proposing Free Trade Agreement to Maldives Amidst Contradictory Claims

The Indian Ministry of External Affairs (MEA) has denied reports that it proposed a bilateral Free Trade Agreement (FTA) to the Maldives. This explanation comes amidst claims from the Maldivian government suggesting otherwise.

MEA spokesperson Randhir Jaiswal stated on Thursday, "No specific proposal for a bilateral FTA with the Maldives has been made by the Government of India." He added that India would consider such an agreement if the Maldives expressed interest, saying, "If the Government of Maldives expresses interest in having an FTA with India, we will give it due consideration."

The denial from India comes in response to statements made by Maldivian Minister for Economic Development and Trade Mohamed Saeed. Saeed had indicated that India had initiated efforts to establish an FTA between the two countries. He was quoted saying, "In my recent talks with India, they expressed their wish to have a free trade agreement with Maldives separately, in addition to SAFTA. The President wants to have that opportunity with all countries."

Why this matters: The denial of a proposed free trade agreement between India and the Maldives has significant implications for the economic and diplomatic relations between the two nations. This development could potentially impact the balance of power in the Indian Ocean Region and influence the trajectory of bilateral ties.

The Maldives, a key maritime neighbor of India in the Indian Ocean Region, has seen fluctuating relations with India. Bilateral ties, particularly in defense and security, improved under the previous Maldivian government. However, since President Mohamed Muizzu, who is known for his pro-China stance, took office last November, the relationship has faced challenges.

In recent developments, the Indian government provided budget support to the Maldives by rolling over a USD 50 million Treasury Bill for an additional year at the request of Maldivian Foreign Minister Moosa Zameer. This move was appreciated by the Maldivian government, which called it a "true gesture of goodwill."

The South Asian Free Trade Agreement (SAFTA), signed by the Maldives in 2004, aims to empower the region economically and facilitate trade. However, the Maldives does not have FTAs with individual countries in the region. The recent claims and counterclaims between India and the Maldives highlight the complexities of their economic and diplomatic relations.

Thus, while the Indian government has denied proposing a bilateral FTA to the Maldives, it remains open to considering such an agreement if the Maldives expresses interest. The situation highlights the nuanced and evolving nature of the bilateral relationship between the two nations.

Key Takeaways

• India denies proposing a bilateral Free Trade Agreement (FTA) with the Maldives.
• Maldivian Minister claimed India initiated FTA talks, which India rejects.
• India open to considering FTA if Maldives expresses interest.
• Bilateral ties between India and Maldives have faced challenges since new president took office.
• India recently provided budget support to Maldives by rolling over a USD 50 million Treasury Bill.