News Desk
MALÉ, Maldives – Official bilateral negotiations between India and the Maldives have commenced to establish a comprehensive Free Trade Agreement (IMFTA), marking a major step toward deeply integrating the economies of the two South Asian neighbours.
According to India’s Ministry of Commerce, the virtual negotiations opened on 29 June and are scheduled to conclude on 7 July. Both governments have set an ambitious target to formally finalize and sign the pact before the end of this year.
The agreement primarily focuses on the reduction of trade tariffs, the simplification of regulatory custom procedures, and the facilitation of cross-border services and investments. The foundational Terms of Reference (ToR) for the talks have already been mutually finalized by the Indian Commerce Ministry and the Maldivian government.
Mohamed Saeed, the Maldivian Minister of Economic Development and Trade, stated that the trade pact is a core component of the administration’s overarching strategy to diversify the national economy and mitigate its dependency on limited sectors. “This agreement will unlock fresh commercial pathways for Maldivian businesses and solidify the economic partnership between our two nations,” Mr Saeed said.
The free trade talks coincide with a broader bilateral push to establish seamless economic and financial connectivity. Parallel initiatives currently under discussion include the introduction of India’s Rupee-denominated RuPay card in the Maldives, the implementation of a local-currency settlement mechanism for bilateral trade, and the integration of India’s Unified Payments Interface (UPI) instant payment system. Foreign Minister Irthisham Adam and India’s External Affairs Minister S. Jaishankar recently reviewed frameworks to fast-track these financial integrations.
The framework for the IMFTA was originally announced in 2024 during an official state visit to India by President Dr Mohamed Muizzu. India remains one of the Maldives’ largest trading partners, and the upcoming treaty is expected to grant Maldivian exports preferential access to one of the world’s largest consumer markets.
The Maldives already maintains an active Free Trade Agreement with China. While that treaty is currently operational, the government has yet to release a detailed public assessment regarding its exact economic yields for the archipelago.
