In a significant development for international diplomacy, Malaysian Prime Minister Anwar Ibrahim is set to visit India in the coming weeks. This visit marks a key moment in the bilateral relations between Malaysia and India, following closely on Indian Prime Minister Narendra Modi’s scheduled trips to Poland and Ukraine later this month. The visit will center on strengthening ties across various sectors, including trade, science and technology, education, agriculture, tourism, defence, and regional issues such as the situations in Bangladesh, Myanmar, and West Asia.
Strengthening Bilateral Relations
The upcoming visit is part of ongoing efforts to deepen the robust relationship between India and Malaysia. Recently, Indian External Affairs Minister S. Jaishankar visited Kuala Lumpur, where he held extensive discussions with Prime Minister Anwar Ibrahim. Their conversations spanned a wide range of topics, including trade, digital cooperation, and regional issues like the crisis in Myanmar. A notable outcome from their meeting was Malaysia’s agreement to support the establishment of a branch campus of the Indian Institute of Technology (IIT) in Malaysia, underscoring a commitment to enhanced educational collaboration between the two countries.
Revisiting the India-Malaysia Free Trade Agreement
One of the central topics of discussion during the Malaysian Prime Minister’s visit is expected to be the review of the India-Malaysia Free Trade Agreement (FTA), formally known as the Comprehensive Economic Cooperation Agreement (CECA). Implemented in July 2011, CECA was intended to boost trade in goods, services, and investments between the two nations. However, despite its intentions, India has experienced a growing trade deficit with Malaysia, a trend mirrored in its broader trade with the ASEAN region.
In fiscal year 2010-2011, when CECA was signed, India had a trade deficit of US$2.65 billion with Malaysia. By the fiscal year 2023-24, this deficit had expanded to US$5.49 billion, even as exports from India increased. India’s exports to Malaysia stood at US$7.26 billion, while imports from Malaysia reached US$12.75 billion during the same period. This growing imbalance has prompted India to seek a review of the FTA to make the trade relationship more balanced and mutually beneficial.
India’s Commerce Department is already gathering feedback from various industry bodies and export promotion councils to identify barriers to trade with Malaysia. This input will inform India’s agenda for the upcoming joint commission meeting, where potential adjustments to CECA will be discussed. A key focus may be on Product Specific Rules of Origin (PSR), which could offer more flexibility for Indian exports.
Expanding Defence and Maritime Cooperation
Another critical aspect of the visit will be discussions on expanding defence and maritime cooperation. Both India and Malaysia have identified significant potential for growth in these areas. Key areas of collaboration include government-to-government engagement, tri-service cooperation, training, UN peacekeeping operations, and bilateral services engagement. There is also strong interest in defence industrial cooperation, particularly in research and development, and regional engagements.
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Malaysia has expressed confidence in India’s defence capabilities and is keen to explore opportunities for co-design, co-production, and co-development across various sectors. Potential collaboration areas include shipbuilding and maintenance, where India’s expertise could complement Malaysia’s needs. Both countries operate similar platforms in their armed forces, such as the Sukhoi fighter jets and Scorpene submarines, providing a basis for deeper technical cooperation.
India’s Hindustan Aeronautics Limited (HAL) has manufactured around 280 Sukhoi fighter jets in collaboration with Russian counterparts, which could benefit Malaysia’s air force. Similarly, India’s experience in building Scorpene submarines could be valuable for Malaysia. Additionally, Malaysia is interested in leveraging Indian expertise in emerging technologies like cybersecurity, artificial intelligence, and the Maintenance, Repair, and Overhaul (MRO) sector, particularly for submarine parts.
Addressing Regional Concerns
The visit will also address regional issues, focusing on the crises in Bangladesh, Myanmar, and West Asia. Both India and Malaysia share concerns about these ongoing issues and are likely to explore collaborative approaches to address them. The Rohingya refugee crisis, in particular, remains a significant concern for both nations, which have been involved in humanitarian aid efforts and seeking peaceful resolutions.
Conclusion
Prime Minister Anwar Ibrahim’s visit to India represents a pivotal moment in the bilateral relationship between the two countries. With a focus on enhancing trade ties, expanding defence cooperation, and addressing regional challenges, this visit is expected to further solidify the strategic partnership between India and Malaysia. As both nations navigate complex regional and global dynamics, their collaboration is poised to play a crucial role in shaping the future of Southeast Asia.
