India, Malaysia Agree to Expand Cooperation in Emerging Sectors

August 21, 2024 Posted by India Briefing Written by Archana Rao Reading Time: 3 minutes

India and Malaysia have agreed to enhance trade relations, facilitate worker movement, and promote the use of their national currencies for bilateral transactions. On August 20, 2024, Indian Prime Minister Narendra Modi and Malaysian Prime Minister Anwar Ibrahim met to discuss ways to elevate the partnership between their nations.

India’s Prime Minister Modi hosted bilateral talks with Malaysian Prime Minister Ibrahim in New Delhi, focusing on expanding cooperation in emerging areas, such as digitalization, defense manufacturing, semiconductors, and artificial intelligence (AI).

On August 20, 2024, the leaders acknowledged the success of the Enhanced Strategic Partnership established in 2015, which has significantly strengthened ties between India and Malaysia. The two countries agreed to elevate this partnership to a Comprehensive Strategic Partnership.

Expanding cooperation across key sectors

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Anwar Ibrahim, who assumed office in 2022, made his first official visit to India as the Malaysian PM. According to media reports, the Malaysian leader is keen on improving relations with India. Since April 2023, both nations have been settling trade in their respective currencies, the rupee and the ringgit, and India’s palm oil imports from Malaysia have seen a noticeable increase.

The latest round of discussions covered a wide range of areas, including defense, trade, digital technology, education, tourism, and cultural exchange.

During the meeting of the two Prime Ministers, several key agreements were signed, including Memorandums of Understanding (MoUs) covering employment, traditional medicine, digital technology, culture, youth engagement, financial services, and governance reforms. These agreements underscore the expanding scope of cooperation between the two nations.

India also agreed to support Malaysia’s request to join the BRICS grouping, a move that Prime Minister Ibrahim has been advocating for.

India-Malaysia trade growth

Modi has claimed that in FY 2023-24, Malaysia invested US$5 billion in India. The trade between the two countries reached US$20.01 billion in the previous financial year. In addition, Modi called for a swift review of the ASEAN-India Trade in Goods Agreement (AITIGA) to strengthen supply chains.

India-Malaysia Trade Trends Year-On-Year (Value in US$ Million)
Trade	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
India exports to Malaysia	6,364.66	6,057.68	6,995.04	7,156.16	7,262.15
Growth %		-4.82	15.47	2.30	1.48
India imports from Malaysia	9,782.28	8,373.05	12,424.20	12,734.94	12,754.01
Growth %		-14.41	48.38	2.50	0.15
Total Trade	16,146.94	14,430.73	19,419.24	19,891.11	20,016.17

Source: Ministry of Commerce and Industry

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Meanwhile, Indian Foreign Ministry official Jaideep Mazumdar announced a special one-time export of 200,000 metric tons of non-basmati rice to Malaysia, despite India’s general ban on such exports.

On July 20, 2023, India announced its decision to ban exports of non-basmati white rice to calm rising domestic prices in the domestic market. The country is the world’s top rice exporter, accounting for some 40 percent of the global trade in cereal.

Advancing collaboration

India and Malaysia agreed to further collaboration in sustainable energy, climate change, agriculture, and cultural exchange. India expressed interest in selling defense equipment to Malaysia, including aircraft produced by state-owned Hindustan Aeronautics Ltd. Both nations also agreed on a framework to ensure the welfare of Indian workers in Malaysia, where approximately 140,000 Indian workers are currently employed. This number could increase as India seeks to create more job opportunities both domestically and abroad.

Conclusion

The latest discussions between India and Malaysia mark a significant milestone in India-Malaysia relations, with a focus on expanding cooperation across various sectors and tackling global challenges together.

Additionally, both sides agreed to collaborate further on global challenges such as sustainable energy, climate change, and worker welfare, positioning India and Malaysia as strong partners in the region and on the global stage.

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