| Written by By Judith Evans in Malé (Minivan News), on 01-02-2008 21:45 |
Existing trade agreements between India and the Maldives could be reviewed as soon as three months’ time following a visit from Indian Minister of State for Commerce Jairam Ramesh.
The current Indo-Maldives Trade Agreement dates from 1981, and governs India’s supply of commodities including eggs, potatoes, rice and construction materials.
But this week’s talks established a rapid time frame for a fresh agreement, which will have a new emphasis on investment. The two governments hope to complete a joint feasibility study within 90 days, Maldives Trade Minister Mohamed Jaleel said on Thursday.
Beyond Imports
Maldives relies heavily on imports, of which 10 to 11 per cent come from India, including many of the basic construction materials crucial to the ongoing development of Maldives’ tourism industry. These include river sand and aggregates.
But Sri Lanka and Singapore both exceed India in export figures to Maldives, and Ramesh told Indian newspaper The Hindu he was keen to close this gap. “In private investment, we figure nowhere compared to Singapore and Malaysia,” he added.
The new agreement will aim to streamline existing provisions to make them more “rules-based and transparent”, according to Jaleel, but it will also focus on increasing Indian investment in Maldives.
Areas of potential private investment include healthcare, IT and environmental research, Jaleel said. The ministers also discussed co-operation on areas such as higher education provision, currently unavailable in Maldives, and human resources.
Economic Development
Ramesh reportedly congratulated Maldivian ministers on the country’s rapid economic growth rate and discussed ways in which the two countries can work together to sustain growth.
The visit laid the groundwork for longer-term loan provisions to Maldivian companies from the State Bank of India, a measure aimed at tackling poor availability of credit, which Jameel told Minivan News was a “sickness” affecting the Maldivian economy.
Ramesh’s visit forms part of a tour to South Asian Association for Regional Cooperation (SAARC) countries ahead of the South Asian Free Trade Area (SAFTA) meeting in March and July’s SAARC summit in Sri Lanka.
SAFTA was set up in 2004 to ensure a gradual reduction of trade tariffs between South Asian countries, and came into force in 2006. Ramesh’s tour aims to facilitate the reduction of non-tariff barriers to trade with India as part of the movement towards free trade in the region.
The Maldives Foreign Ministry said that the Indo-Maldives Joint Commission for Economic and Technical Cooperation would meet shortly, but did not specify a date.
Ramesh was in transit at the time of going to press and hence unavailable for comment. Courtesy: Minivan News
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