India Malaysia Trade
India Malaysia Trade Agreement
Introduction
India established diplomatic relations with the Federation of Malaya (predecessor state of Malaysia) in the year 1957. India and Malaysia have developed close political, economic, and sociocultural relations presently. Malaysia hosts the third largest PIO community in the world after the US and UAE. There is growing engagement in all aspects of the bilateral relationship. The year 2022, marks 65 years of diplomatic ties between Malaysia and India and presents an opportunity to further strengthen and diversify the existing ties, especially in the economic sphere.
India-Malaysia Trade
- Malaysia is the 13th largest trading partner for India while India stands amongst the 10 largest trading partners globally. Furthermore, Malaysia has emerged as the third largest trading partner for India from the ASEAN region and India is the largest trading partner for Malaysia among the countries of the Southeast Asian region.
- Bilateral trade reached US$ 17 billion in FY 2021-22
- This includes exports worth approx. US$ 12 billion and imports worth approx. US$ 7 billion.
- Malaysia ranks as the 27th largest investor in India with an FDI inflow of US$ 1,161 million from April 2000-September 2022.
- Bilateral trade reached US$ 13.86 billion in April-November 2022. This includes exports worth US$ 4.9 billion and imports worth US$ 8.9 billion from April-November 2022.
- Surrounded by busy sea lines of communication such as the Strait of Malacca and the South China Sea, Malaysia is also a key pillar of India’s Act East policy and critical to India’s maritime connectivity strategies.
Major exported items from India to Malaysia with amount & quantity
- India exported 5,265 commodities to Malaysia in FY 2021-22.
- India’s export to Malaysia stood at US$ 6.99 billion in FY 2021-22.
- Major exported items from India to Malaysia include minerals fuels, mineral oils & products, bituminous substances, and mineral waxes (US$ 2,237.57 million); followed by organic chemicals (US$ 510.27 million) in FY 2021-22.
- India’s export to Malaysia stood at US$ 4.9 billion from April-November 2022.
- Major exported items from India to Malaysia include petroleum products (US$ 1,221 million) followed by organic chemicals (US$ 399 million) etc. during April-November 2022.
Major imported items by India from Malaysia with amount & quantity
- India imported 2,814 commodities from Malaysia in FY 2021-22.
- India’s imports from Malaysia stood at US$ 12.4 billion in FY 2021-22.
- Major items imported by India from Malaysia include animal or vegetable fats & oils & their cleavage products; animal vegetable waxes (US$ 4,429.71 million); followed by minerals fuels, mineral oils & products, bituminous substances, mineral waxes (US$ 1,344.66 million) in FY 2021-22.
- India’s imports from Malaysia stood at US$ 8.9 billion from April-November 2022.
- Major items imported by India from Malaysia include vegetable oils (US$ 2,610 million) followed by petroleum: crude (US$ 1,015 million) etc. from April-November 2022.
Economic Relations and Investments
Malaysia ranked as the 26th largest investor in India with an FDI inflow of US$ 1.12 billion during the period April 2000 to September 2021 (Source: DPIIT, Gol).
Considering the Mauritius route, Malaysia's investments in India are expected to be to the tune of US$ 7 billion.
The highest investment proposals are in the telecom sector, followed by fuels, roads, and highways. Some of the top Malaysian companies have invested in India, notably in the telecom sector (Maxis Communications in Aircel (US$ 2 billion), Axiata in Idea Cellular (US$ 0.75 billion), and Khazanah in IDFC, Apollo Hospitals, Yes Bank, etc. Construction projects include the construction of the airports in Hyderabad (in 2008) and Delhi (in 2010) through a partnership between India’s GMR and Malaysian Airports. The largest presence of Malaysian construction companies outside Malaysia is in India.
There are more than 150 Indian companies, including 61 Indian joint ventures, operating in Malaysia, in diverse sectors such as textiles and yarn manufacture, drugs and pharmaceuticals, specialty chemicals, information technology, education, steel furniture, biotechnology, healthcare, etc.
In terms of tourism, India remains one of the top market sources for Malaysia and has contributed 735,309 arrivals (+22%) in 2019, while more than 332,000 Malaysians visited India during the same period reflecting a healthy tourist exchange.
Recent Trends & developments
- India and Malaysia marked 65 years of modern diplomatic relations at a commemorative event, “India-Malaysia@65” held on 9th September 2022, organised by the Consortium of Indian Industries in Malaysia (CIIM) and Malaysia India Business Council (MIBC) at the Kuala Lumpur Convention Centre in Malaysia
- Taking forward the high-level defence engagements, Defence Ministers of India and Malaysia held a virtual bilateral meeting in June 2022
- Minister of Human Resources, Malaysia, Mr. Sivakumar Varatharaju Naidu, in his address at 17th Pravasi Bhartiya Divas Convention indicated signing of a Memorandum of Understanding to be signed between India and Malaysia on recruitment and employment of workers
- Economic cooperation between Malaysia and India was reviewed at the Foreign Office Consultations (FOC) meeting held in April 2022 and it was decided to enhance all aspects of cooperation and to make the partnership truly meaningful and mutually beneficial
- An MOU on the Establishment of an Academic Chair in Ayurveda between the University Tunku Abdul Rahman (UTAR) and the Institute of Teaching and Research in Ayurveda (ITRA) Jamnagar was signed in October 2021
Conclusion
India and Malaysia completed 65 years of modern diplomatic relations in 2022. The relations between India and Malaysia had grown from Strategic Partnership to an Enhanced Strategic Partnership in the last 10 years, with new cooperation in cultural diplomacy, digital economy, and agriculture commodity forthcoming.
Contacts
- High Commission of India, Kuala Lumpur
H.E. Mr. B.N. Reddy - High Commissioner
Officials
H.E. Mr. B.N. Reddy - High Commissioner
Ms C.Sushma - First Secretary (Commerce and Education);
Telephone: +6 03 4025 2323
Email : com.kl@mea.gov.in - High Commission of Malaysia, India
Address: No. 50-M, Satya Marg, Chanakyapuri, New Delhi, Delhi 110021
Telephone: +011 2415 9300
Email : mwdelhi@kln.gov.my
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