State Visit of Malaysian PM to India

Duration: August 19-21
Purpose: This was the first official visit of Malaysian Prime Minister Dato Seri Anwar bin Ibrahim to India.

Key Highlights

• Upgrade to Comprehensive Strategic Partnership:
• The relationship between India and Malaysia was elevated to a Comprehensive Strategic Partnership, building on previous agreements from 2010 and 2015.
• Agreements and MoUs Signed:
• Multiple agreements were established covering various sectors including:
• Workers’ mobility
• Digital technology
• Culture
• Tourism
• Sports
• Education
• India committed to supporting Malaysia’s bid to join the BRICS grouping.
• Additional Rice Export:
• India agreed to allocate 200,000 metric tonnes of white rice to Malaysia, addressing the country's food import dependency.
• Addressing Bilateral Friction:
• Both leaders recognized past tensions, particularly concerning:
• The Citizenship Amendment Act
• The reorganization of Jammu and Kashmir
• The extradition of Zakir Naik
• While not directly addressing the extradition, discussions focused on broader security concerns, particularly extremism and radicalism.
• Agreement on Local Currency Trade:
• India and Malaysia will conduct trade transactions in their local currencies: Indian Rupees (INR) and Malaysian Ringgits (MYR).
• This decision follows a significant $5 billion investment from Malaysia to India.
• Focus on Expanding Economic Cooperation:
• Emphasis was placed on cooperation in emerging technologies such as:
• Semiconductors
• Fintech
• Artificial Intelligence (AI)
• Quantum computing
• The Comprehensive Economic Cooperation Agreement (CECA) will be reviewed to enhance economic ties.
• Digital and Startup Collaboration:
• Plans were set to establish a Digital Council and a Startup Alliance to promote cooperation in digital technologies.
• Efforts to connect India’s Unified Payments Interface (UPI) with Malaysia’s Paynet were discussed to enhance digital financial integration.
• People-to-People Ties:
• Agreements were made to simplify visa procedures and increase educational exchanges, including the allocation of 100 ITEC scholarships for Malaysian students in advanced courses like Cyber Security and AI.
• Cultural and Educational Initiatives:
• An Ayurveda Chair will be established at the University Tunku Abdul Rahman, while a Tiruvalluvar Chair will be set up at the University of Malaya.
• Malaysia’s participation in significant Indian cultural and historical events, such as the installation of the Sengol in the new Parliament House, was positively acknowledged.

India – Malaysia Bilateral Relationship: Overview

• Diplomatic Ties:
• India established diplomatic relations with the Federation of Malaya (now Malaysia) in 1957.
• Indian Diaspora:
• Malaysia is home to over 2.95 million people of Indian origin, making it the second-largest PIO community globally, after the US.

Economic & Commercial Relations

• Trade Partnership:
• Malaysia ranks as India’s 16th largest trading partner, while India is among the top ten trading partners for Malaysia.
• The Comprehensive Economic Cooperation Agreement (CECA), effective since 2011, covers goods, services, and investment.
• Bilateral Trade:
• Bilateral trade reached approximately $19.89 billion in 2022-23:
• Exports from India: $7.15 billion
• Imports to India: $12.73 billion
• Major Exports from India:
• Mineral fuels and oils
• Aluminum and related products
• Meat and edible offal
• Iron and steel
• Copper and articles thereof
• Major Imports to India:
• Palm oil
• Mineral fuels and oils
• Electrical machinery and equipment
• Animal or vegetable fats and oils
• Investment Landscape:
• Malaysia is the 31st largest investor in India, with an FDI inflow of $1.18 billion from April 2000 to September 2023.
• Indian companies have invested in about 250 manufacturing projects, totaling over $2.62 billion.
• Trade between India and Malaysia can now be settled in Indian Rupees (INR), alongside other currencies.

Defense and Security

• Cooperation in Defense:
• Both countries participate in each other’s biennial defense exhibitions, LIMA and MILAN.
• India is involved in the Cooperative Mechanism on the Straits of Malacca and Singapore (SOMS), contributing to projects that enhance navigational safety and environmental protection.

Conclusion

The India-Malaysia bilateral relationship is robust, characterized by deep economic ties, significant cultural connections through the Indian diaspora, and collaborative efforts in defense and security. The recent agreements and strategic partnerships further solidify this relationship, paving the way for future cooperation.