India Grants Duty‑Free Oil Exports to Maldives

In a move that deepens economic ties with its Indian Ocean neighbours, India has added the Maldives to the list of countries that are exempt from two key domestic duties on petroleum exports – the Special Additional Excise Duty (SAED) and the Road and Infrastructure Cess (RIIC). 

The amendment, signed on June 30, also includes Mauritius, expanding a previously Nepal‑, Bhutan‑, Bangladesh‑ and Sri Lanka‑centric exemption regime.

The SAED, a windfall‑profit levy introduced under India’s Neighbourhood First Policy, is intended to capture part of the upside from rising global oil prices. Combined with the RIIC, the two duties currently amount to INR 4 per litre on petrol and INR 8.5 per litre on diesel. Under the new exemption, the Maldives will pay only half of these rates, effectively reducing the cost of importing refined petroleum products from India.

“The concession reflects India’s commitment to supporting the economic resilience of its closest partners,” a senior official from the Ministry of Petroleum & Natural Gas said.

“By easing the duty burden, we aim to help the Maldives manage the impact of soaring international oil prices, particularly as the Middle‑East conflict continues to drive up crude costs.”

The timing of the duty waiver is significant. Global oil markets have been turbulent in recent months, with the tensions in the Middle East escalating into a broader regional conflict that has pushed Brent crude above USD 90 per barrel. 

India’s decision to extend the exemption comes as the Maldives, heavily reliant on imported fuels for power generation and transportation, seeks to stabilise domestic energy prices.

Earlier this year, India extended similar duty‑free status to Nepal, Bhutan, Bangladesh and Sri Lanka, all signatories to the Neighbourhood First policy. The inclusion of the Maldives and Mauritius underscores New Delhi’s broader strategic goal of strengthening economic linkages across the Indian Ocean region, while also leveraging its refining capacity to boost regional energy security.