India pares restriction-free food exports to Maldives amid tension in ties

India's overall exports to Maldives stood at $217 mn in 2017-18 as compared to the $197 mn in the previous year

At a time when diplomatic tussle between India and Maldives has been making news, New Delhi has slashed the amount of restriction-free exports of essential commodities permitted to the island nation every year.

 

According to a recent notification, the Directorate General of Foreign Trade (DGFT) has cut by half or more the quantities of rice, potatoes, onion and dal that is exported to the island nation free of restrictions.

 

It also slashed the levels of wheat flour to a bare minimum. Maldives imports all of its food requirements.

 

Relations between New Delhi and Maldives, India’s long-term ally in the Indian Ocean region, has been souring over the past couple of years as the political leadership in the island nation is veering towards China, which has pumped in significant investments in the tourism and infrastructure sectors.

 

India had signed one of its earliest trade treaties with Maldives, back in 1981.

 

Apart from the usual promises of non discriminatory trade and freely convertible currency, the pact is also based on the important premise that on an annual basis New Delhi will decide the quotas for food export to the island nation that will not face any export restriction. The rationale behind this is that India may put certain curbs in case it needs to protect domestic supplies.

 

Article IX of the agreement specifies that, “The Government of Maldives will furnish to the Government of India a list of essential commodities required by the former in a calendar year by the end of November of the year preceding the one to which the requirement relates.” Subsequently, specified quota allocations for the following calendar year is made by India by the end of December. That depends on “the supply availability and the overall need of the Government of Maldives,” according to the agreement.

 

It is this specific point that a senior commerce department official has pointed towards, saying that Maldives has not asked for higher quotas in its latest communication to New Delhi. “Such long standing trade policies also have to take into account multi-year changes in trends. We have seen that Maldives imported these commodities solely from us and as a result, our latest calculation is based on the average utilisation of the quotas by Maldives over the past three years,” the official said.

 

India’s overall exports to Maldives stood at $217 million in 2017-18 as compared to the $197 million in the previous year.

 

Official statistics also show that quantity-wise, the latest quotas allocated to Maldives are almost as much as the gamut of trade over the past two years. Potato exports stood at 5,589 metric tonnes while onion and rice exports were 10,271 and 23,361 metric tonnes respectively.

 

Diplomatic heatwave in Indian Ocean

 

Bilateral diplomatic relations between India and Maldives have taken a beating since February, when Maldivian President Abdulla Yameen declared a state of emergency. While preliminary talks diffused the situation, Yameen has on multiple times told Delhi not to interfere, citing the developments as the country’s internal matter.

Earlier this month, India refused entry to a Maldivian member of Parliament who is a close aide of Yameen, even though he is entitled to visit India as a legislator.

Maldives has also told India to take back two Dhruv advanced light helicopters which had been gifted to the nation back in 2013 along with the 26 Navy personnel who are currently posted in Maldives to maintain and run the machines. Media reports also suggest that the Maldivian government hasn’t renewed over 2,000 work permits of Indian workers and it has not given any reason for doing so. Newspapers in the country have carried advertisements saying Indian workers are not wanted. Over 25,000 Indians work in the island nation.