First direct cargo ferry service between India, Maldives flagged off

Commencement of the service was announced by External Affairs Minister S Jaishankar during his virtual meeting with the Foreign Minister of Maldives Abdulla Shahid on August 13.

The service will run twice a month, and will be operated by Shipping Corporation of India.

Sources said the ferry will herald direct connectivity for movement of cargo between India and Maldives and thereby boost bilateral trade.

Despite geographical proximity, India is only the fourth largest trade partner of Maldives. Maldives imports more from the UAE, China and Singapore.

“Direct ferry will reduce transportation cost, provide a timely, short and cost effective means of transportation for goods from India to Maldives and thereby incentivize more trade between the two countries,” a source said.

The ferry has a cold storage facility, which will allow more exports from Maldives of tuna fish and other marine food items.

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 for 27 principal import items of Maldives, India’s share of imports is well below their potential.

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 due to Covid-19.

The pandemic has drawn the world’s attention towards resilient supply chains. In May-June this year, while Maldivian imports had fallen by 50 per cent, India became the second largest exporter to Maldives. “India has, therefore, proven that it can provide supply side security to the Maldives during such uncertain times,” the source said.