Maldives and India have agreed to begin discussions on a Free Trade Agreement, also called an FTA.
This means the two countries are planning ways to make buying and selling goods between them easier.
What is a free trade agreement
A free trade agreement is a deal between countries to reduce or remove taxes on goods traded between them.
These taxes are called import duties.
An FTA can also help countries trade services and encourage businesses to invest across borders.
What was agreed
India’s Ministry of Commerce said both countries have agreed on something called Terms of Reference, or TOR.
The TOR will set the rules, scope, and structure for the discussions.
It is the first step before formal negotiations begin.
Trade between Maldives and India
Recent trade data shows changes in how the two countries exchange goods.
India’s exports to Maldives decreased by 37.11 percent to 56.88 million US dollars.
At the same time, imports from Maldives to India increased by 37.14 percent to 118.82 million US dollars.
India expanding trade partnerships
India is also working on trade agreements with other countries.
These include the United Kingdom, Oman, the European Union, and New Zealand.
Maldives and other trade agreements
Maldives has already signed a free trade agreement with China.
The new talks with India could create more opportunities for trade and business between the two countries.
Photo: Prime Minister Narendra Modi meets with Maldives President Mohamed Muizzu
