The Maldives and India have signed the Terms of Reference (ToR) required to begin formal negotiations on a bilateral Free Trade Agreement (FTA).

The initiative forms part of ongoing Government efforts to strengthen trade and economic relations with key international partners and expand market opportunities for Maldivian businesses.

Discussions on establishing an FTA between the two countries were first agreed during the visit of Indian Prime Minister Narendra Modi to the Maldives in July 2025.

Following consultations across several sectors, both countries reached agreement on the Terms of Reference, which outline the framework and key areas to be covered during negotiations. The signing of the ToR was confirmed by India’s Ministry of Commerce and Industry.

With the framework now agreed, the next stage will involve detailed negotiations aimed at drafting the full free trade agreement.

If finalised, the agreement would become the Maldives’ second free trade agreement with another country. The Maldives previously signed an FTA with China in 2017. However, the agreement remained inactive for several years before it was implemented in January 2025.

The FTA with China has already created new opportunities for Maldivian businesses. A similar agreement with India is expected to expand trade opportunities and improve market access for Maldivian companies in one of the world’s largest economies.