Maldives-India Free Trade Agreement Set to Launch This Year

The Free Trade Agreement (FTA) between Maldives and India is scheduled to be implemented within this year, Economic Development Minister Mohamed Saeed has announced, marking a significant milestone in the economic partnership between the two neighbouring nations.

The Minister said the agreement will further strengthen economic ties between the two countries and open up new opportunities for trade, investment, and sustainable economic growth.

This agreement represents a transformative moment for Maldives, Minister Saeed said in a statement. 

India is one of Maldives' largest trading partners—one of the world's largest consumer markets. The Free Trade Agreement, which is set to kick off this year, will provide easy access for domestic products to one of the world's fastest growing markets.

The decision to pursue the FTA was announced during President Dr Mohamed Muizzu's visit to India in 2024, with the Maldivian government actively seeking input from local businessmen and stakeholders to ensure the agreement serves national interests.

Minister Saeed emphasised that the agreement is a core component of efforts to diversify the Maldives economy, which has historically relied heavily on tourism.

Every sector stands to benefit—from fisheries to tourism, construction to healthcare, he said. Especially fisheries products, other marine products and Maldives' own products will get special incentives from the Indian market. It will be a great opportunity for thousands of young people involved in the creative economy and future e-commerce business.

The agreement is expected to deliver both direct and indirect benefits to the tourism industry through the creation of a free trade corridor, the Minister added.

SMEs Set to Gain Major Advantages

Among the biggest beneficiaries of the FTA will be small and medium enterprises (SMEs), according to Minister Saeed.

This agreement will not only reduce customs duties. It will remove administrative barriers to trade, digitize documents, speed up freight and customs processes. This will strengthen the operations of Maldivian businesses and reduce costs. Technical assistance and technology exchange will increase Maldives' productivity,” he said.

Investment Sectors Identified

The Ministry has identified several priority areas for investment and cooperation under the FTA:

• Value addition and food processing of the fisheries sector

• Digital Services and Financial Technology (FinTech)

• Renewable Energy and Healthcare

• Logistics, tourism, and education

Minister Saeed confirmed the agreement would be formulated in consultation with stakeholders from a wide range of sectors, including fisheries, tourism, construction, aviation, and health.

The agreement, which comes into force this year, is projected to increase Maldives' economic resilience and serve as a major force in resisting global economic shocks.

While the SAARC countries already have the South Asian Free Trade Agreement (SAFTA), Minister Saeed noted that for various reasons, it has not been as effective as intended.

With Maldives and China already maintaining a free trade agreement, the forthcoming deal with India will establish commercial partnerships with the world's two largest consumer bases.