India denies fading ties behind export cut to Maldives

India has denied any link to deteriorating bilateral relations with the Maldives with its recent decision to slash exports of essential commodities to its once friendly neighbour.

Based on the 1981 trade agreement, India exports certain essential commodities whose quantities are notified every year. These items are exempt from any restrictions or prohibitions on Indian exports during the period of notification.

The latest notification which comes into effect from April, fixed the amount of potatoes, onions, rice, wheat flour, sugar, pulses and eggs that can be exported to the Maldives over the next year.

The sharpest drop in allocation – 98.4% percent– has been for wheat flour. Just 946.21 metric tonnes of wheat flour has been allocated for export to the Maldives in 2018-19, compared to 59442.17 metric tonnes in 2017-18.

The second highest decrease in a year-to-year comparison was in sugar of 97.1 percent The lowest reduction among the seven items was in onions – a relatively low 49 percent.

“This is not an arbitrary action that has been taken,” an official in the Central Board of Direct Taxes and Customs told The Hindu.

“India and Maldives have had a long-standing relationship and this is a continuation of that. Normally, they send us their requirement and we try to meet all of it. This time, we have not received the requirement and so we calculated the average of the last three years and have set that as the limit for this year.”

“It seems to be a rationalisation of the quota based on actual utilisation in the recent past,” an official in the Ministry of External Affairs was quoted in The Hindu.

“Earlier, the government of India used to routinely grant in complete trust whatever amounts were requested by the Maldives side. This is probably a political message.”

Bilateral ties between the two countries had soured after Maldives President Abdulla Yameen Abdulla Gayoom in February declared state of emergency following an order by the country’s Supreme Court to release a group of opposition leaders convicted in widely criticised trials.

Recently Maldives' chief government lawmaker Ahmed Nihan Hussain Manik was denied entry into Chennai while Maldives has reportedly put a squeeze on issuing work permits for Indian expatriates working in the island nation.