The governments of the Maldives and India have formally agreed to commence negotiations on a Free Trade Agreement (FTA), marking a significant step toward deepening economic cooperation and trade integration between the two nations.
The decision follows the meeting between President Dr Mohamed Muizzu and Indian Prime Minister Narendra Modi during the President’s state visit to India in October 2024, and was further reinforced by Prime Minister Modi’s visit to the Maldives. The agreement to begin FTA negotiations was formalised with the exchange of Terms of Reference during the visit.
The proposed FTA aims to establish a structured institutional framework for trade liberalisation and long-term economic cooperation. According to the Ministry of Economic Development and Trade, the agreement will focus on reducing trade barriers, encouraging investment flows, and promoting broader integration between the two countries.
To complement the FTA process, both sides are pursuing additional trade-facilitating measures, including the integration of the Maldives’ instant payment platform, Favara, with India’s Unified Payments Interface (UPI), as well as the implementation of a streamlined local currency settlement mechanism. These developments are expected to simplify payment processes, promote cross-border trade, and enhance convenience for Indian tourists and Maldivian citizens residing in India.
Officials described the agreement as a transformative milestone in bilateral relations, opening up new avenues for sustainable economic growth, expanded market access, and long-term prosperity for both countries.
