New Delhi: Indian industry on Tuesday sought a bilateral investment promotion and protection treaty with the Maldives against the backdrop of the abrupt termination of a major international contract with GMR Infrastructure Ltd four years ago.
The calls came as the Maldives unveiled a roadshow in New Delhi to showcase investment opportunities.
The third edition of the Maldives Investment Forum was inaugurated by the Maldivian vice-president Abdullah Jihad in the presence of the country’s minister for economic development Mohamed Saeed. Two previous roadshows were held in Singapore in 2014 and in Beijing last year.
While tourism and fisheries have been traditional areas for investment in the atoll nation, home to some 300,000 people and sitting astride some of the busiest sea lanes in the world, Maldives is now seeking investment in other sectors with priority being given to job creation.
Giving an overview of the Maldivian economy, vice-president Jihad said president Abdullah Yameen was taking steps to narrow the fiscal deficit through policy implementation and sustained revenue collection. Easing of monetary policy that had led to increased credit availability for the private sector and lower inflation levels was also doing its bit to make the economy attractive for private sector investments, he said.
“Port development, shipping, IT services, financial services, export processing activities, trans-shipment,international logistics, bulk braking and bunkering, education and health are some of the strategic areas where we plan to create special economic zones,” the vice-president said.
“Investors are free to submit proposals in order to avail themselves of the opportunity to gain tax exemptions and other privileges afforded to special economic zones,” he said.
Making his pitch to Indian investors, Maldives’ minister for economic development Saeed said the Yameen government “promotes a transparent, hassle-free and liberal trading and investment environment and believes that a “strong, predictable and transparent commercial regime is critical for private sector led growth.”
The memory of the Maldives government abruptly terminating a India-Malaysia joint venture for modernising the Male airport in 2012 saw Indian industry seeking greater predictability and protection for investments in the Maldives.
Last month, the GMR Group, which was in a joint venture with a Malaysian firm for modernising the Male airport, said it had won an international arbitration against the Maldives government and been awarded $270 million as compensation for the arbitrary cancellation of its $500 million contract.
“The signing of a bilateral investment promotion and protection agreement would improve the confidence of the business community and also provide an effective mechanism for any dispute resolution,” said Vikramjit Singh Sahney, a past president of the Federation of Indian Chambers of Commerce and Industry (Ficci) which helped put together the Maldives Investment Forum in collaboration with the Maldives government.
The cancellation of the deal had soured ties between India and the Maldives. Relations stabilised with the visit of Indian foreign minister Sushma Swaraj in October 2015. It was during that visit that India and the Maldives agreed to hold the investment roadshow in New Delhi.