India-Malaysia Ties: Enhanced Trade && Investment Potential

Kuala Lumpur, Nov 26 (PTI) Describing India's relationship with Malaysia as “very precious”, India's envoy here has said that there is a huge potential for enhanced bilateral trade and investments to bolster their strategic ties.

“This is one relationship which is very important for the region given the proximity, diaspora connect, and the desire of both governments to realise this enhanced strategic partnership,” India's High Commissioner to Malaysia B N Reddy said.

Talking to a group of Indian journalists who visited Malaysia as part of the ASEAN-India Media Exchange Programme 2023, Reddy said there is a huge potential for both trade and investments between the two countries.

He described the relationship with Malaysia as “very precious” for India and said the two countries just concluded 65 years of diplomatic relations last year and they are in the process of now realising the enhanced strategic partnership established during Prime Minister Narendra Modi's visit in 2015.

“During the Prime Minister's visit, it was decided that our engagement with Malaysia would be taken to newer heights wherein covering, I would say the entire spectrum of the relationship,” he said.

“To put it in a nutshell, Malaysia has the second largest Indian-origin community. I would say there is a mini-India here. Even though Tamil speakers are the largest, you also have the Malayalam, Telugu, Punjabi, Gujarati, and Odiya-speaking people, which provides a natural bridge for us to engage with Malaysia more deeply," he said, referring to a 2.9-million-strong overseas Indian community in the country (2.75 million PIOs and 0.16 million NRIs).

He said the real sustenance in the relations comes from the trade and economic investment relations.

"We have USD 20 billion bilateral trade and we expect it to increase to USD 25 billion in the next three years," Reddy said.

In 2022, India was Malaysia's 11th largest trading partner with total trade amounting to RM 86.22 billion (USD 19.63 billion), an increase of 23.6 per cent compared to the recorded value in 2021.

“We had a joint commission meeting held in Delhi earlier this month led by External Affairs Minister S Jaishankar and Malaysian Foreign Minister Zambry Abdul Kadir. It was one occasion where we were able to review the entire relationship. Before that, we had defence secretary-level talks in Delhi to review the entire defence cooperation and we had the visit of the defence minister,” Reddy said.

In July, Defence Minister Rajnath Singh visited Kuala Lumpur during which both sides approved an amendment in the memorandum of understanding on India-Malaysia defence cooperation signed in 1993.

During his visit, Singh inaugurated the regional office of Hindustan Aeronautics Limited (HAL) in Kuala Lumpur to facilitate close defence industrial collaboration between India and Malaysia.

Reddy said the two countries conducted three joint military exercises last year in which 600 personnel from Indian armed forces participated. The two sides are holding talks to explore new initiatives to further strengthen the engagements.

“India is looking forward to defence exports,” he said.

Malaysia was among a handful of countries that showed keen interest in procuring India's indigenously developed Tejas aircraft - a single-engine multi-role fighter aircraft capable of operating in high-threat air environments.

Underlining the growing relationship, Reddy said that since Prime Minister Anwar Ibrahim took office in November last year, eight ministers and deputy ministers from Malaysia have already visited India.

Prime Minister Ibrahim is likely to travel to India in the first half of next year in reflection of the growing upswing in overall ties between the two nations.

“The political relationship is growing. The people-to-people connect is growing. The potential for growing a relationship is good. All we have to do is prepare for it better. At this point, it's a good political understanding between the governments and our effort is to truly realise this potential so that both countries benefit,” the Indian envoy said.

Reddy said over 100 Indian IT companies, including TCS, Tech Mahindra, HCL Technologies, and Ramco Systems, are operating in Malaysia.

He said there are many areas of cooperation like Science and Technology, space, nuclear and other technologies cooperation.

The high commissioner also highlighted key areas for potential collaboration, such as renewable energy and the semiconductor sector.

“The canvas of relationship is wide,” he said, adding that India can be a constructive player in this region.

Earlier this month, Malaysian Foreign Minister Kadir said the two sides are firming up a framework for conducting trade in national currencies and initiating a process to review the 12-year-old comprehensive economic cooperation agreement to include new domains and items.

Malaysia is a member of the 10-member ASEAN or the Association of Southeast Asian Nations bloc, which is considered one of the most influential groupings in the region. Other members of the bloc are Indonesia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia.