The Hindu Business Line : Action plan to strengthen bilateral ties with Maldives

A six-point action plan to put India-Maldives economic relationship on a firm footing has been suggested by the Minister of State for Commerce, Mr Jairam Ramesh, following his recent two-day visit — as part of the efforts of the Prime Minister, Dr Manmohan Singh’s, quest to redefine the country’s economic relationship with its neighbours.

Talking to Business Line here recently, Mr Ramesh said foremost is the fact that the extant 1981 Trade Agreement has run its course and does not reflect the deep changes that have occurred in both the countries.

As such, he said, both the countries would set up a joint working group to prepare, in the next three months, a roadmap for a comprehensive economic partnership agreement on which negotiations could start, encompassing trade, investment and services.

FDI flow

Mr Ramesh regretted that India is virtually absent as a source of private investment, as 90 per cent of the FDI into Maldives flow from Singapore and the balance from Malaysia, albeit some prominent NRI investment in resorts. So, secondly, he said, India would hold an investment meet in Bangalore to be mounted by the Maldives Government to attract Indian private investment in different fields like tourism, health care, IT and fisheries.

He said India would also assist the Maldives in attracting specific private companies in which it is interested like Apollo in health, NIIT in IT training and Reliance in IT/telecom/power, Mr Ramesh added.

Third, he said, India and Maldives would explore opportunities of joint ventures in value-added tuna processing, since currently Maldives’ exports of tuna are about six times that of India’s but India has big plans for expansion, particularly in the Andaman and Nicobar Islands.

SBI’s role

Fourth, he said, the State Bank of India, Male, has played a key part in sustaining Maldives’ economic boom, with almost 65 per cent of all tourism loans stemming from the bank. The SBI has also been a crucial source of financing for the fisheries sector. The Minister pointed out that total exposures of the SBI in Maldives exceeds $500 million.

Mr Ramesh also stated that the annual supply of essential commodities like eggs, rice, wheat, flour, vegetables, sand and stone from India to Maldives would continue, but with a degree of automaticity and without Maldives having to run around the Indian bureaucracy for approvals.

Finally, the Minister said entrepreneurs from Maldives had evinced interest in real estate at Pune. India would also explore the possibility of Maldivian entrepreneurs investing in tourism in Lakshadweep, Andaman and Nicobar Islands, and Minicoy Islands, which share a common culture and ecology with Maldives.

Mr Ramesh said that with the forthcoming visit of President Gayoom of Maldives on February 11-12 to India, the six-point action plan suggested by him might be useful inputs to the authorities for further cementing the bilateral relationship with this important member of SAARC.

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