India and Malaysia last Friday marked 65 years of modern diplomatic relations at a commemorative event, “[email protected]”, organised by the Consortium of Indian Industries in Malaysia (CIIM) and Malaysia India Business Council (MIBC) at the Kuala Lumpur Convention Centre in Malaysia. At the event, Malaysia’s Foreign Minister Datuk Seri Saifuddin Abdullah said, “Our relations predate the 65 years of official bilateral relations, the relations between India and Malaysia and the people of India and Malaysia is not just a bilateral relation but a civilisational relation.”
The Minister added that there has been significant progress in the two countries’ bilateral relations and the civilisational relationship enjoyed by both countries made the relationship even more special.
Malaysia and India first established official diplomatic relations in 1957 following the Federation of Malaya’s independence and the end of colonial rule.
About seven per cent (2.3 million people) out of Malaysia’s population of 33 million are of Indian ancestry.
Malaysia’s Foreign Minister said in his speech that the relationship between India and Malaysia had grown from Strategic Partnership in 2010 to an Enhanced Strategic Partnership in 2015, with new cooperation in cultural diplomacy, digital economy and agro commodity forthcoming.
Over the years, more than 20 bilateral agreements have been signed between the two nations who were both once under British colonial rule and are now full members of the Commonwealth of Nations.
The more recent ones include an MoU on Cyber Security signed in 2015, an MoU on Cultural Exchange Programme (2015), a Revised Air Services Agreement (2017), an MoU between Malaysia Palm Oil Board (MPOB) and the Institute of Chemical Technology (ICT), India (2017), and MoU of Mutual Recognition of Educational Degrees and Certificates between AIU and MQA (2017).
India and Malaysia signed a bilateral Comprehensive Economic Cooperation Agreement (CECA) covering goods, services and investments which came into effect in July 2011.
Since then, bilateral trade between the two countries has also been growing steadily. Between 2015 and 2020, trade increased by over 30 per cent.
Based on Malaysian government figures, a total of USD 16.66 billion worth of goods were exchanged in 2020 with India importing Malaysian products to the value of USD 10.8 billion that year.
“During my visit to New Delhi in June 2022, I met my (counterpart) India’s External Affairs Minister Dr S. Jaishankar at the sidelines of the special ASEAN-India Foreign Ministers’ meeting and discussed possible new cooperation in various fields including cultural diplomacy as well as trade and investment,” Saifuddin continued.
He said that over 150 Indian companies have invested USD 3 billion in Malaysia in various sectors namely biotechnology, financial services, manufacturing, and the textile industry.
India and Malaysia have had a mutually beneficial trading relationship for many years. Currently, Malaysia is the 13th largest trading partner for India, whereas India is among the top ten trading partners for Malaysia.
India’s major exports to Malaysia include mineral oils, mineral fuels, meat and edible meat offal, iron and steel, copper, organic chemicals, nuclear reactors, boilers, machinery and mechanical appliances, and electrical machinery and equipment.
Flowing in the opposite direction, key goods imported from Malaysia to India comprise palm oil, mineral oils, mineral fuels, electrical machinery and equipment, animal or vegetable fats and oils, nuclear reactors, boilers, machinery and mechanical appliances, copper, wood, wood charcoal, aluminium, organic chemicals, iron and steel, and other chemical products.
Malaysia ranks as the 26th largest foreign investor in India with FDI (foreign direct investment) flows of USD 1.12 billion during the period from April 2020 to September 2021. The actual figure is probably closer to USD 7 billion as most Malaysian investments are transacted through Mauritius-based entities.
The largest investments from Malaysia are in telecommunications, the oil and gas industry, and roads and highways.
On the other hand, Indian companies have invested over USD 2.62 billion in over 250 manufacturing projects including USD 1.37 billion by around 135 Indian companies resulting in the creation of more than 15,000 jobs in the manufacturing sector in 2020. Prominent Indian companies with a presence in Malaysia include TCS, HCL, Tech Mahindra, Wipro, Infosys, and Ramco Systems.
As for tourism, there is a healthy exchange of visitors travelling between the two countries. India is one of the top market sources for Malaysia. During the last pre-COVID year, India contributed 735,309 arrivals in 2019, an increase of over 22.5 per cent compared with the previous year while more than 334,500 Malaysians visited India during the same period.
During the “[email protected]” event, Saifuddin urged Indian companies to expand their operations in Malaysia and make Malaysia their hub in ASEAN due to its strategic location and conducive business environment.
Also present at the event were the Indian High Commissioner to Malaysia, B.N. Reddy.
In Reddy’s speech, he commended the 65 years of vibrant ties between India and Malaysia. He said that the Indian diaspora community in Malaysia, the second largest in the world, is living proof of the bond of friendship between India and Malaysia.
The diplomat highlighted the success of the Melaka-Manipal Medical College in Malaysia which is producing close to 15,000 medical doctors in Malaysia to date. On the back of this success, he is looking forward to India’s first offshore campus of the Indian Institute of Technology (IIT) in Malaysia.