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Diplomatic Friction: India's Port Restrictions on Maldives Trade

Introduction

In a move that is sure to further deepen the rift between India and Maldives, the Indian government has imposed strict port restrictions on the export of essential goods to the Maldives. This decision, announced through a notification from the Directorate General of Foreign Trade (DGFT), comes amid growing diplomatic tensions between the two nations. The new directive mandates that the export of essential items to the island country will now be permitted exclusively through four designated customs stations, signaling a tightening of trade regulations.


Table featuring the names of essential commodities with quantity allowed to be shipped out | The Print  


The Directive

According to the DGFT notification, the export of essential commodities to Maldives under the bilateral trade agreement between the two governments will now be routed through the following four customs stations:


1. Mundra Sea Port, Gujarat

2. Tuticorin Sea Port, Tamil Nadu

3. Nhava Sheva Sea Port (JNPT), Maharashtra

4. ICD Tughlakabad, New Delhi


This directive is derived from the Foreign Trade Policy (FTP) 2023 and the Foreign Trade (Development & Regulation) Act, 1992, as amended. The notification states, "The Central Government hereby incorporates the following conditions in Notification No. 03/2023 dated 05.04.2024 for exporting essential commodities to Maldives under the bilateral trade agreement between the Government of India and the Government of Maldives."


Background: Unique Bilateral Mechanism:

On April 5, amidst escalating diplomatic tensions between India and Maldives, India authorized the export of specific quantities of essential goods for the 2024-25 period through a distinct bilateral arrangement, as requested by the Maldivian government. This bilateral deal marks the highest export quotas since its establishment in 1981, when India and Maldives entered into a trade agreement enabling the export of essential goods.


Increased Quotas and Expanded List of Items

Under the bilateral mechanism, India has significantly increased the export quotas for various essential commodities to the Maldives:


- The Maldives' construction sector witnessed a 25 percent rise in the allocated quota for river sand and stone aggregates, reaching 1,000,000 metric tonnes.

- Quotas for eggs, potatoes, onions, sugar, rice, wheat flour, and dal (pulses) have been increased by 5 percent.

- Despite a worldwide prohibition on rice, sugar, and onion exports from India last year, the nation has persisted in supplying these commodities to the Maldives, highlighting the importance of this bilateral trade agreement.


The Indian High Commission in Maldives has reiterated a firm commitment to promoting human-centric development in the Maldives, in line with India's 'Neighbourhood First' policy.


Strained India-Maldives Ties

The decision to impose port restrictions comes against the backdrop of strained relations between India and the Maldives since President Mohamed Muizzu assumed office. Muizzu has been vocal in criticizing New Delhi, both during and after the presidential elections. On April 13, he announced that Indian military personnel stationed on the second platform have departed from the Maldives, although there has been no official confirmation from the Indian side.


Furthermore, Muizzu affirmed that the remaining contingent of Indian military personnel will depart from the Maldives by the agreed-upon date of May 10. Reports suggest that an initial group of 25 Indian troops left the island nation around March 13.


Earlier in April, Muizzu had underscored the presence of Indian troops on three platforms in the Maldives. Maldives' PSM News cited him as stating that the withdrawal of foreign troops from the Maldives is being conducted "in accordance with diplomatic norms and principles".


Diplomatic Implications and Future Outlook

The imposition of port restrictions on the export of essential goods to Maldives is a significant development that could potentially escalate tensions between the two nations. While India has cited legal provisions for this move, it is widely perceived as a response to the strained diplomatic relations and Maldives' stance on the presence of Indian military personnel. As the situation unfolds, both nations will be closely watched to see how they navigate this delicate diplomatic landscape. The impact of these trade restrictions on the Maldivian economy and the bilateral relationship will be closely monitored by regional and global observers.


In conclusion, the Indian government's decision to impose port restrictions on the export of essential goods to Maldives is a significant development that underscores the complex political dynamics between the two nations. As the diplomatic tensions continue to simmer, the future of this bilateral trade agreement and the broader relationship remains uncertain, leaving observers to speculate on the potential ramifications for regional stability and economic cooperation.

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