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A direct cargo ferry service between India and Maldives that started on Monday is likely to reduce transportation time and cost and boost trade between the two countries, as per official sources
“Despite geographical proximity, India is currently only the fourth largest trade partner of Maldives. China, UAE and Singapore are all ahead of India in terms of their exports to Maldives. The ferry will herald direct connectivity for movement of cargo between India and Maldives for the first time and thereby give a boost to bilateral trade,” a source familiar with the development told BusinessLine.
India’s bilateral trade with Maldives was around $286 million in 2019. A direct ferry will reduce transportation cost, provide a timely, short and cost-effective means of transportation for goods from India to Maldives and thereby incentivise trade, the government believes.
“Since Maldives is a 100 per cent import dependent country, improved connectivity between India and Maldives will help boost bilateral trade and help economic activity in Maldives, already reeling under the disruption brought about by Covid-19,” the source added.
The ferry service, which was first announced by Prime Minister Narendra Modi in June 2019 during his visit to Maldives, was launched in an e-flag off ceremony jointly by Shipping Minister Mansukh Mandaviya and Minister of Transport and Civil Aviation of Maldives Aishath Nahula.
Commencement of the cargo ferry service between India and Maldives was announced by External Affairs Minister S Jaishankar during his virtual meeting with the Foreign Minister of Maldives Abdulla Shahid on August 13, 2020.
The service will run twice a month and will be operated by Shipping Corporation of India ship on a vessel with a capacity of 380 TEUs. It will have a cold storage facility, which will also allow more exports from Maldives of tuna fish and other marine food items which are a speciality of Maldives.
In March-April this year, FICCI’s Kerala State Council conducted a study on the viability of a ferry service between India and Maldives. The study found that there were 27 principal import items of Maldives where India had the potential of increasing its share.
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