Maldives-China FTA: Trade to Hit $1 Billion from 2025

Male, Sep 17 (PTI) The Maldives on Tuesday announced that the FTA with China is set to take effect on January 1, 2025 and the bilateral trade is expected to increase to USD 1 billion with its implementation.

The Free Trade Agreement (FTA) with China will offer significant benefits to the Maldives, including enhanced opportunities for exporting various goods and providing additional services, Maldives' Minister of Economic Development and Trade Mohamed Saeed told a press conference here at the President's Office.

The FTA was initially signed in 2014 and approved by the Maldivian parliament in 2017. However, its implementation was postponed following a change in government in 2018.

China is Maldives' one of the largest trade partners with bilateral trade exceeding USD 700 million. “The government projects that this figure will rise to USD 1 billion once the agreement is in effect,” according to the state-run Public Service Media (PSM News).

The announcement by the minister comes days after Maldives signed a Memorandum of Understanding (MoU) with the People's Bank of China (PBOC) aiming to establish a framework for current account transactions and direct investments in their respective currencies.

The government is confident that the MoU, signed on September 13, will play a pivotal role in reducing the dependency on dollars and appreciating the Maldivian currency, Rufiyaa (MVR), the PSM News said.

Maldives is working out a similar Rupee-Rufiyaa arrangement with India.

Earlier on Monday, the spokesperson of the President's Office Heena Waleed too mentioned the benefits that Maldives will gain after implementing the FTA.

“When the FTA between Maldives and China comes into effect, this trade figure is going up to USD 1 billion and the agreement will greatly facilitate businessmen and locals travelling to China,” she said.

“With this agreement, a lot can be done in Maldivian Rufiyaa without paying in dollars. With the Maldivians able to pay in Maldivian Rufiyaa, the dependence on dollars will be reduced,” Heena further said.