Indian textile exports have increased 4.15% in the first quarter of the current fiscal year, driven by rising demand from Commonwealth of Independent States (CIS) and South Asian markets. According to the latest data from the commerce ministry, textile exports grew to $8.78 billion in the first quarter of FY25 compared to $8.43 billion in the same period last year. This assumes importance given that the domestic apparel and textile industry contributes about 2.3% to the country’s GDP, 13% to industrial production, and 12% to exports. India is the world’s sixth largest exporter of textiles and apparel. The CIS region, including nations like Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan, recorded a growth of 113.33%, increasing to $64 million in the quarter compared to $30 million in the corresponding months of the last fiscal year.South Asia also saw a significant increase of 35.65%, reaching $898 million. Exports to Latin America increased by 15% to $346 million in the first quarter due to strengthened trade relations and rising demand for Indian textiles in Latin American markets. However, regions like North East Asia (NEA) and Africa witnessed a decline in exports, highlighting the need for strategic adjustments to address market-specific challenges. Textile exports to NEA contracted by 28%, decreasing to $298 million in the first quarter. Similarly, exports to Africa contracted 15.74% to $423 million.
Industry insights
“The first quarter of FY25 is showing some upward movement in the exports of apparel, which is a welcome departure from the downward trends observed in the last couple of years,” said Rahul Mehta, chief mentor, Clothing Manufacturers Association of India (CMAI). “This is largely due to the slightly improved sentiments in the US economy as well as the shift desired by buyers from China and Bangladesh,” Mehta said. However, one must keep in mind that the growth is minimal and on a low base, he said. CMAI is an industry body representing textile manufacturers and exporters and advocates for the clothing industry's interests. According to a Crisil report, India’s textile industry is expected to grow in the calendar year 2024, driven by a consistent improvement in domestic demand, gradual recovery in exports, and lower cotton prices. The main buyers of Indian ready-made garments are European nations led by Germany, the Netherlands, Italy, Poland, and Denmark.
Source: Indian Shipping News
The Government has approved setting up of 7 (Seven) PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks in Greenfield/Brownfield sites (including a Greenfield project in Virudhanagar Tamil Nadu) with world class infrastructure including plug and play facility with an outlay of Rs. 4,445 cr for a period of seven years upto 2027-28. It is envisaged that each park when completed will generate 1 lakh direct and 2 lakh indirect employments. In order to implement the PM MITRA Scheme in Virudhnagar, a Special Purpose Vehicle (SPV) i.e. ‘PM Mega Integrated Textile Regions and Apparel Park, Tamil Nadu Limited’ has been incorporated with Government of Tamil Nadu holding 51% stake in the SPV and remaining 49% being held by the Government of India. The process of obtaining Environmental Clearance as well as layout approval from Directorate of Town and Country Planning has been completed. The Process of providing Water and Power supply up till the park gate is in progress. Memoranduma of Understanding (MoU) worth Rs 1200 cr for investment in the park have been signed so far. With a view to increasing investments, generating employment opportunities and boosting exports in textile sector, the Ministry is implementing Scheme for Integrated Textile Park (SITP) to provide support for setting up textile parks with world-class, state-of-the-art infrastructure in textile hubs across the country. The scheme was in implementation up to 31.03.2021. However, the Scheme has now been subsumed under the umbrella Scheme of Textile Cluster Development Scheme (TCDS) and an outlay of Rs.568.15 Crore has been allotted for completing ongoing projects only. The details of the textile parks in Tamil Nadu under the Scheme are given below:
(Rs. In Cr)
|
S. No. |
Name of the park |
District |
Approved Project Cost |
Total govt grant released |
Actual Employment |
Units Operational |
Park Status |
|
1 |
PalladamHi-Tech Weaving park, Palladam |
Tirupur |
55.42 |
22.17 |
2650 |
90 |
Completed |
|
2 |
Komarapalayam Hi-Tech Weaving Park |
Namakkal |
31.33 |
12.54 |
853 |
56 |
Completed |
|
3 |
Karur Integrated Textile Park, Karur Park |
Karur |
116.1 |
40 |
5000 |
35 |
Completed |
|
4 |
Madurai Integrated Textile Park Ltd |
Madurai |
87.3 |
31.43 |
2551 |
17 |
Completed |
|
5 |
Perarignar Anna Handloom Silk Park |
Kanchi-puram |
82.52 |
9.91 |
750 |
12 |
Under implementation |
|
6 |
Pallavada Textile Park |
Erode |
106.58 |
10 |
825 |
3 |
Under implementation |
|
7 |
The Great Indian Linen & Textile |
Erode |
104.29 |
12 |
170 |
7 |
Under implementation |
This information was given by the Union Minister of State for Textiles, ShriPabitra Margherita in a written reply today in the Rajya Sabha.
Source: PIB
A side hug, or a half hug, is a friendly gesture but one that’s well short of a full embrace. Chief economic advisor suggests a similar move — allowing Chinese companies to invest in India. It would solve at least two immediate problems, and stop a third one in the future. Many multinational companies have moved some of their manufacturing out of China in recent years due to various reasons, ranging from geopolitics to simply a desire to diversify the supply chain. That's how Apple's iPhone assembly line came to India. ALSO READ: 'What doesn't kill you makes you stronger,' China trolls new US tariffs The tech giant assembled $14 billion, 14% of its global production, worth of iPhones in India in the financial year ending March 2024. However, by the survey's own admission, India has not been an immediate beneficiary of the China plus one strategy deployed by many companies. "Take, for example, nations like Mexico, Vietnam, Taiwan and Korea, which were direct beneficiaries of the US's trade diversion from China. Even while these nations increased their share of exports to the US, they also displayed a concomitant rise in Chinese FDI (foreign direct investment). Therefore, the world cannot completely look past China, even as it pursues China plus one,"India's latest economic survey said. Simply put, while the US may now import more from Mexico than China, the money to make the stuff is still coming from Beijing and Shanghai. Brazil and Turkey have deployed a similar model, too, and India may be tempted to replicate it. However, India has its own grouse with the Xi Jinping regime in China. Following the escalation in border disputes between the two countries in the last decade, India has cracked down on a number of Chinese investments in India. Vivo and Lava executives were arrested for alleged money laundering, Chinese mobile apps like TikTok and PubG have been banned, and MG Motor had to find a local partner in JSW Group to remain in business in the world's third-largest automobile market. In response, China blocked access to critical resources like solar equipment, and the situation could get a lot worse in the future. "China's overwhelming dominance in the supply of processed critical minerals and materials for energy transition renders a true decoupling between the two nations neither easy nor likely," the survey noted. Critical minerals are precious minerals that are rarer than others. They are crucial inputs in the making of mobile phones, computers, batteries, electric vehicles, and green technologies like solar panels and wind turbines. While the two countries sparred, India's imports from China have surged. According to a recent report from PTI, a news agency, India's trade deficit—the difference between imports and exports —with China has ballooned to over $387 billion in the last five years. Nageswaran's argument is not that India should become China's bestie but that keeping the relationship frozen for a prolonged period may be costly, if not debilitating. "The question now is, and it's an important question, it's a question even the great United States is grappling with? How is it that you benefit from being a neighbour to a technologically sophisticated and substantial market on your border without losing strategic autonomy? I think it can be done. This may not be the best time to do so. But I think over the longer run, one should be looking to a future where the Indian and Chinese economies are perhaps even more integrated than they are, noting the fact that after the US, I think I am right, China remains our second largest trading partner," Suman Berry, the vice chairman of NITI Aayog, India's government think tank, explained. However, the final decision will lie with Prime Minister Narendra. Modi and his trusted Lieutenant, Home Minister Amit Shah. They will have many more factors to consider than economists.
Source: CNBC
The unveiling of India's 2024 Budget marks a pivotal moment in the nation’s economic journey, setting the stage for a transformative era in trade and investment. Ranked 18th in merchandise exports and 7th in services exports globally, India has shown steady growth in its market share over the years. In the context of these achievements, the government aims to focus on boosting exports, attracting foreign investments, and fostering sustainable growth. The 2024 budget aims to unlock new opportunities and drive the nation's economic resurgence.
Expectations
From the Economic Survey and previous Budget announcements, it was clear that the government intended to introduce measures to maximise the export potential of the IndiaMiddle East-Europe Economic Corridor. Expectations included streamlined export procedures, financial incentives to encourage businesses to leverage new trade opportunities, and the enhancement of international trade agreements, particularly Free Trade Agreements (FTAs) with key markets. Additionally, a key focus was aligning budget measures with national developmental goals such as Viksit Bharat to ensure sustainable growth.
Key Policies in the Budget
Shaping FDI and Export Prospects The Finance Minister's strategic measures are designed to follow a three-fold process aimed at enhancing India's economic landscape. The first step focuses on attracting foreign direct investment (FDI) and encouraging foreign companies to establish a presence in India, thereby making the country a more attractive destination for global investors. The simplification of FDI regulations and reduction in corporate tax for foreign companies is anticipated to attract foreign investments, improve operational efficiencies, and support the development of robust infrastructure, contributing to overall sectoral growth and economic stability. The simplification has great significance in the scenario of FDI shrinkage by 3.49% in FY24 to $44.42 billion compared to $46.03 billion in FY23, especially from the UK, the UAE, Germany, Cyprus, Singapore and the US. India had slipped 7 notches to rank 15 in the 2023 World Investment Ranking. The second step involves providing manufacturing incentives to encourage companies to set up and expand their operations in India. To achieve this, the government has provisioned tax benefits, subsidies, grants, or other financial support to attract companies to invest in manufacturing facilities within the country. According to the Budget 2024, Customs duty exemptions for specific goods used in the manufacture of export products aims to reduce production costs and enhance competitiveness. This policy supports sectors such as textiles, leather, and handicrafts, positioning Indian products more favourably in international markets and driving export growth. Furthermore, the reimbursement of EPFO contributions for newly hired employees is designed to stimulate job creation and incentivize domestic manufacturing. Additionally, the budget has proposed to come out with “Vivaad se Vishwas Scheme” 2.0 for quick resolution of pending tax litigations and disputes, cut down the time limit for initiation of reassessment proceedings and hiked the appeal threshold limit. These initiatives are, also, expected to generate substantial employment opportunities, particularly for young individuals, thereby strengthening the labour market and supporting economic growth. The National Industrial Corridor Development Program is a cornerstone of the Finance Minister’s vision. By supporting the creation of industrial hubs, this program might be able to improve infrastructure, generate employment, and attract both domestic and foreign investments. These efforts collectively position India as a favourable destination for FDI, fostering economic advancement. The final step focuses on promoting export opportunities for companies that have set up manufacturing operations in India. Simplifying and rationalising export duties on raw materials such as skins, hides, and leather are intended to enhance the competitiveness of the leather industry. This measure is poised to increase exports from this sector, contributing to economic diversification and sustainable growth, contributing to overall sectoral growth and economic stability. Establishing dedicated e-commerce export hubs through public-private partnerships (PPP) aims to streamline regulatory and logistical processes for online trade, significantly increasing India's export capacity and targeting $1 trillion in merchandise exports by 2030. Collectively, these initiatives are designed to enhance India's global trade competitiveness, stimulate economic growth, and ensure sustainable development, reinforcing the nation's position in the world trade and investment market.
Have Expectations Been Met?
The 2024 Budget shows a promising alignment with several key expectations, addressing many long-standing barriers to trade efficiency. The announcements regarding streamlined export procedures and financial incentives align well with the expectations, encouraging businesses to leverage new trade opportunities. Although explicit measures for the materialisation of new FTAs and the India-Middle East-Europe Corridor were not seen, the Budget's stimulus on e-commerce export hubs and customs duty exemptions supports enhanced trade relationships. To sum up, the 2024 Budget adopts an optimistic view with the goal of boosting investment and commerce in India. With careful execution and continued assistance, these policies can drastically increase economic expansion and cultivate significant global connections. India's future shall be shaped in large part by the budget's emphasis on trade, exports, and investments as the country navigates its path towards prosperity and self-reliance.
Source: Money Control
Indo-Australian trade is on a great trajectory owing to the recently floated free trade agreement — the Economic Cooperation and Trade Agreement (ECTA) — and exports from India to Australia have gone up substantially, said Australian High Commissioner Philip Green. He said that Australia is actively exploring the possibilities in building Amaravati capital city in Andhra Pradesh. Speaking to The Hindu, before a meeting with Andhra Pradesh Chief Minister N. Chandrababu Naidu in Amaravati, Mr. Green said, “In the last five years, India’s exports to the world have gone up by about 37% but in the same period, India’s exports of goods to Australia were up by 66%, nearly twice as much.” With regard to the trade pact, there is a 77% utilisation rate by traders and key sectors in the last four months of this year; Indian exports of apparel have gone up more than 20%, iron and steel by 25% and agriculture exports up by 30%. Mr. Green said he was visiting to congratulate Mr. Naidu on his election victory and also to explore development opportunities in Amaravati. “We can talk about a number of sectors where Australia has interest in engaging — education, agriculture, water management, green energy, supply chain etc. You may know, Canberra, the capital of Australia was developed from three sheep farms. And it’s now one of the most beautiful capitals in the world. I’ll be listening very carefully to what Chief Minister Mr. Naidu has to say on the plans for Amaravati,” he said. Australia is also focused on export of clean coal, critical minerals for green hydrogen, green battery manufacture, green steel, iron ore and solar panels needed for rooftops. “Mr. Modi wants over ten million roofs with solar panels across the country, a huge opportunity for Australia,” Mr. Green said. He lauded the contribution of the Indian diaspora in Australia in the fields of information technology and other service sectors. The Indian community makes up over one million, out of the 26 million population of Australia. “It’s the fastest growing community in our country. Last year, over 1,00,000 visas were issued to people from India,” he said.
Russian invasion on Ukraine ‘unconscionable’ On the geo-political scenario, Mr. Green said that Russia’s invasion of Ukraine is a clear breach of international law by a country, which is in the Security Council. “Russia has signed multiple treaties with Ukraine to protect its territorial integrity... So, what Russia has done in Ukraine is, for us, unconscionable and we will continue our strong support to Ukraine,” he asserted. When asked about India accessing cheaper oil from Russia, he said it was a bilateral arrangement between the two countries and a part of traditional relations between them. A major part of India’s multi-alignment in the Indo-Pacific region is in close engagement with Western countries and it is bringing India and Australia closer together as the countries seek to redress the problems in security, Mr. Green said. He added, “We want India to be successful globally. We back India’s ambition to be a permanent member of the UN Security Council. We think that’s fair and we think that’s right. We want India’s vision for the global self to be translated into reality.” India is a necessary ingredient to maintain peace in the Indian Ocean region owing to its geographic location, history and culture, and it has a strategic role to play, he said. “We held a meet in Perth and 27 countries in the region took part. And the meet was jointly hosted by India and Australia. We welcome India’s influence in the region.”
India’s trans-shipment hub at Nicobar On India’s trans-shipment hub, which is under construction at Galatea bay in the Nicobar Islands, the Australian envoy said he preferred direct shipment instead of trans-shipment. “A lot of our trade is trans-shipped through ports like Singapore. But as we grow the economic partnership, why don’t we have direct shipping lines from the west coast of Australia to the east coast of India?,” Mr. Green said.
Source: The Hindu
Synopsis India aims to become a USD 30 trillion economy with a per capita income of USD 18,000 by 2047, according to NITI Aayog’s "Vision for Viksit Bharat @ 2047: An Approach Paper." This ambitious goal requires India to avoid the Middle-Income Trap by significantly boosting its GDP and per capita income. India needs to strive to be a USD 30 trillion economy with a per capita income of USD 18,000 per annum by 2047, the approach paper for vision for Vikshit Bharat in 2047 has said. NITI Aayog in a paper titled 'Vision for Viksit Bharat @ 2047:An Approach Paper' said India needs to avoid the Middle-income trap and carefully work towards breaking out of it. USD 30 trillion economy by 2047 with a per capita income of USD 18,000 per annum. "The GDP would have to grow nine times from today's USD 3.36 trillion and the per capita income would need to rise 8 times from today's USD 2,392 per annum," it said. The paper also noted that progressing from a middle-income to a high-income level requires sustained growth in the range of 7-10 per cent for 20-30 years and very few countries have managed to do this. Defining the concept of Vikshit Bharat, the paper said it is a Bharat which will have all the attributes of a developed country with a per capita income that is comparable to the high-income countries of the world today. It is a Bharat whose social, cultural, technological, and institutional features will mark it out as a developed nation with a rich heritage and one that is capable of functioning at the frontiers of knowledge. The World Bank defines high-income countries as those whose annual per capita income is more than USD 14,005 (in 2023). India has the potential and aims to be a high-income country by the centenary of its independence in 2047. The paper said upgrading capabilities in manufacturing and logistics and bridging the gap between rural and urban incomes are some of the structural challenges that India needs to address. This document was discussed during NITI Aayog's ninth Governing Council meeting chaired by Prime Minister Narendra Modi. It noted that the country needs to achieve a balance between energy, security, access, affordability and sustainability. The document said improving the competitiveness of industry is equally necessary for the transformation of the country's agricultural workforce into an industrial workforce and making India a global manufacturing and service hub. Noting that a vision for India cannot be the work of a few individuals or of one government, the document said it has to be the result of the collective efforts of the entire nation. According to the document, India is at a turning point in its history and the 21st century can be India's century, as the country pole-vaults into the future confident of its capabilities.
Source: Economic Times
Synopsis the National Financial Information Registry (NFIR) Bill was nearing completion and could be presented in the next Parliament session. The NFIR aims to consolidate financial information to improve credit flow, financial inclusion, and stability. Economic Affairs Secretary Ajay Seth explained that the Budget 2023-24 included this proposal to boost the Indian economy. The Bill for setting up a National Financial Information Registry (NFIR) is in the advanced stage of preparation, and it may be introduced in the next session of Parliament, Economic Affairs Secretary Ajay Seth has said. "It is at an advanced stage. It is in the closing stages of inter-ministerial consultation. We will finalise the Bill soon," he told PTI in a post-budget interview. However, he said, it cannot be introduced in the ongoing session of Parliament but may be in the next session. The objective is to build a public infrastructure for credit-related information, and the right information can be made available by the NFIR to lending agencies. A National Financial Information Registry will serve as the central repository of financial and ancillary information. This will facilitate the efficient flow of credit, promote financial inclusion, and foster financial stability. The passage of the Bill will enable in setting up of a registry and thus help in consolidating all financial information and facilitating financial inclusion and take the Indian economy onto a faster growth trajectory. The Budget 2023-24 proposed setting up of NFIR as a central repository of financial information to facilitate the efficient flow of credit, promote financial inclusion and foster financial stability in the country Talking about growth projection in the Budget, Seth said it has assumed a reasonable nominal GDP growth rate of 10.5 per cent, as a higher assumption could have led to a larger fiscal deficit. "As far as the current year is concerned, fiscal prudence places the demand on us that we are realistic or a bit conservative in assuming what the potential revenues may be while at the same time providing adequate provisions for productive priorities of the government. That is what this Budget does," he said. Compared to the interim Budget, he said, there is a higher provision of about Rs 90,000 crore, including for newer schemes. In that context, he said, "10.5 per cent, we feel, is a reasonable estimate of nominal growth in the economy. Because any higher assumptions would then require us to assume more revenues to come and if those revenues don't come in, then we end up with a higher fiscal deficit". That means more borrowings, and it creates its own set of problems, he said, adding that it is better to have conservative estimates. Buoyed by improvement in revenue collection, the government has lowered the fiscal deficit target to 4.9 per cent for the current financial year against 5.1 per cent estimated in February's interim Budget. However, the Budget retained the fiscal deficit estimate at 4.5 per cent for 2025-26 announced in February.
Source: Economic Times
Synopsis Commerce Secretary Sunil Barthwal held bilateral meetings with Russian and UAE ministers to discuss bilateral trade issues for their early resolution, an official said on Sunday. Barthwal held these meetings on the sidelines of the 14th BRICS (Brazil, Russia, India, China and South Africa) Trade Ministers' meeting in Moscow on July 26. Commerce Secretary Sunil Barthwal held bilateral meetings with Russian and UAE ministers to discuss bilateral trade issues for their early resolution, an official said on Sunday. Barthwal held these meetings on the sidelines of the 14th BRICS (Brazil, Russia, India, China and South Africa) Trade Ministers' meeting in Moscow on July The secretary held bilateral meetings with the Russian Minister for Economic Development Maxim Reshetnikov; Member of the Board (Minister) of Trade, Eurasian Economic Commission Andrey Slepnev; Russia's Deputy Minister of Industry and Trade Alexey Gruzdev; Head of FSVPS (Federal Service for Veterinary and Phytosanitary Supervision) Sergei Dankvert of the Russian Federation. He also met South Africa's Deputy Minister for the Department of Trade, Industry and Competition Zuko Godlimpi, and UAE's Minister of State for Foreign Trade Thani Bin Ahmed Al Zeyoudi. In these meetings "bilateral trade issues were discussed in brief for their early resolution," the commerce ministry said. The meetings with Russia hold significance as both countries looks to increase the bilateral trade to USD 100 billion by 2030. India is focussing on various sectors like electronics, besides taking up issues of non-trade barriers in areas like shrimp and pharma, to boost exports to sanction-hit Russia and move towards achieving this target. At present, the bilateral trade stands at about USD 67 billion. India and Members of the Russian-led Eurasian Economic Union (EEU) are also exploring an opportunity to start talks for a free trade agreement. The Eurasian Economic Union comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. Since the Ukraine war began in February 2022 and the US imposed sanctions on Russia, the trade relationship between India and Russia has shifted significantly. There has been a sharp increase in imports from Russia, resulting in a notable trade imbalance. Exports during the financial year 2020-21 and 2023-24 grew by 59 per cent, while imports surged by about 8,300 per cent, the report said, adding the trade deficit rose from USD 2.8 billion before the war in 2020-21 to USD 57.2 billion at present, think tank GTRI in its report has said. The import surge is solely due to India's strategic procurement of crude oil from Russia influenced by favourable trade terms and Russia's need to find new markets amidst Western sanctions. In 2023-24, India's exports to Russia were USD 4.3 billion, while imports driven by crude oil stood at USD 61.4 billion. Share of crude oil and petroleum products in imports was 88 per cent. India exports a diverse range of products to Russia including smartphones, shrimp, medicine, meat, tiles, coffee, parts of airplanes and helicopters, chemicals, computers, and fruits. In the BRICS trade miniseries meeting, Barthwal called for strengthening the multilateral trading system with WTO (World Trade Organisation) at its core, effective functioning of joint value chains, and expanding interaction among MSMEs. BRICS is a grouping of major emerging economies of the world, comprising over 40 per cent of the world population and accounting for over 16 per cent of global trade. On strengthening multilateralism, the secretary reiterated the collective efforts to find a solution for long pending mandated issues of WTO, in particular, the development aspect and the Special and Differential treatment This treatment gives special rights to developing nations. He stressed the urgent need for resolving the issues including the permanent solution to Public Stock Holding and the constitution of a two-tier Dispute Settlement system. He highlighted that WTO reforms need to be based on the principles and objectives of WTO, leading to more responsive to development requirements of emerging economies, invigorating the WTO through '30 for 30' bringing in at least 30 operational improvements to the WTO before the organization completes 30 years in 2025. He also stated that collaboration will be key for making access to affordable emerging technologies critical for green transition and climate resilience. On the climate-related unilateral measures impacting trade, the Commerce Secretary expressed concern as such measures nullify rights and obligations under specialized multilateral environmental agreements and violative NDC (nationally determined contributions) principles, and ignore the CBDR (common but differentiated responsibilities) principles. For MSMEs, Barthwal said that there is a need to focus on key areas like exploring cooperation in the form of Research and Development, Technology transfers and joint Ventures as well as business development opportunities. He added that India is willing to share its experience with the BRICS countries on the e-revolution in the domains of payments, e-commerce, national identity, banking, and education.
Source: Economic Times
Synopsis Maldives President Mohamed Muizzu expressed gratitude to India for supporting the island nation in easing its debt repayment. He emphasized hopes for stronger ties with New Delhi, including a potential free trade agreement. During his Independence Day address, Muizzu highlighted diplomatic successes, ongoing currency swap negotiations, and the need for economic sovereignty. Despite past tensions and anti-India rhetoric, Muizzu acknowledged India as a crucial ally. Recent diplomatic rows, including troop withdrawal and controversial remarks by Maldivian officials, continue to impact bilateral relations. Maldives President Mohamed Muizzu thanked India for its support of the island nation in easing its debt repayment and affirmed hope that New Delhi and Male would forge stronger ties and sign a free trade agreement. Maldives on Friday. During his address, he commended the administration's foreign policy, celebrating eight months of 'diplomatic success,' according to the Maldives President Office. President Muizzu expressed gratitude to India and China for their support in easing the Maldives' debt repayment, thereby enabling the country to ensure economic sovereignty. Emphasising the need to alleviate the local shortages of US dollars, he said that the Maldives government is negotiating currency swap agreements with both New Delhi and Beijing. The Maldives President also announced that his administration is negotiating a Free Trade Agreement (FTA) with the United Kingdom and expressed hope to reach a similar agreement with India. Notably, the Mohamed Muizzu government in the Maldives took a reconciliatory tone after ties between the two nations soured, leading to a diplomatic row. Last month, President Muizzu also attended the oath ceremony of Prime Minister Narendra Modi, after he took office for the third consecutive term. Earlier this year, Muizzu sought debt relief measures in the repayment of the hefty loans taken from the country over consecutive governments. He even stated that India will continue to remain the Maldives' "closest ally" and emphasised that there was no question about it. The loan amount owed by Maldives to India by the end of last year stood at 6.2 Notably, earlier this year, the International Monetary Fund (IMF) warned Maldives that it faces a high risk of debt distress without significant policy changes. Notably, Maldives President Mohamed Muizzu has displayed 'anti-India' rhetoric and he even ran the electoral campaign on the line of 'India Out'. The removal of Indian troops from the country was the main election campaign of Muizzu's party. Since coming to power, he has taken several steps that have been unconventional from the point of view of India-Maldives ties. He departed from a long convention by not visiting India on the first official visit and instead went to Turkey, followed by China. During his visit, the two countries elevated their ties to comprehensive strategic cooperative partnership and signed around 20 agreements. Last December, the Maldives said it would not renew the Hydrographic Survey agreement made with India. After Muizzu government officially requested India to withdraw troops, the Indian government set up a High-Level Core Group to discuss the matter. The withdrawal of Indian troops was completed in May this year. Days after the withdrawal of Indian soldiers, Maldives Defence Minister Ghassan Maumoon also acknowledged that the country's defence forces were capable of operating the three aircraft donated by India, The row between New Delhi and Male erupted after three Maldivian deputy ministers made derogatory comments against Prime Minister Narendra Modi, over his pictures from the visit to Lakshadweep. PM Modi had called for the Indian island cluster to be developed as a destination for beach tourism and promotion of domestic tourism. The matter snowballed into a major diplomatic row, with New Delhi summoning the Maldivian envoy and registering a strong protest against the viral posts. The three deputy ministers were suspended and they remain under suspension with pay. Maldives Tourism Ministry data showed, earlier this year, that the number of Indian tourists visiting the Maldives dropped by 33 per cent as compared to last year.
Source: Economic Times
