India and Malaysia Seek to Strengthen Bilateral Relations Through Enhanced Trade
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India and Malaysia look to reset relations with trade boost
The two countries started settling trade in their own rupee and ringgit currencies in April last year, and India's palm oil imports from Malaysia has also increased Prime ministers of India and Malaysia sought to reset relations between the two countries on Tuesday as they agreed to boost trade, movement of workers and the use of their own currencies to settle bilateral transactions. Malaysia is home to nearly 3 million people of Indian heritage, but relations soured around late 2019 following remarks by largely Muslim Malaysia's then-Prime Minister Mahathir Mohamad against New Delhi removing the autonomy of India's only Muslim-majority region Kashmir. That had also hit purchases of Malaysian palm oil by India, the world's biggest buyer of edible oils like palm. But the Malaysian approach has changed under Prime Minister Anwar Ibrahim, who took office in 2022 and previously told Reuters he was keen to have good ties with India. The two countries started settling trade in their own rupee and ringgit currencies in April last year, and India's palm oil imports from Malaysia has also increased. "With the support of Prime Minister Anwar Ibrahim, there has been a new momentum and energy in our partnership," Modi said, as Anwar stood by his side during his first visit to New Delhi as prime minister. "Today we have decided that our partnership will be elevated to a 'Comprehensive Strategic Partnership'. We believe that there is still a lot of potential in economic cooperation. Bilateral trade and investment should be expanded." Modi noted that Malaysia had invested $5 billion in India in the past year and identified semiconductors, financial technology, the defence industry and artificial intelligence as areas of possible cooperation. Anwar said his country would reinvigorate relations with India in all fields and that their potential had not been tapped in the past few years. Indian foreign ministry official Jaideep Mazumdar told a press conference the country would make a one-off export of 200,000 metric tons of non-basmati rice to Malaysia, making an exception to a ban on such shipments. Mazumdar said India is also keen to sell defence equipment to Malaysia, as well as aircraft manufactured by state-run Hindustan Aeronautics Ltd. The two countries also agreed a framework for the welfare of Indian workers going to Malaysia, which sources labour from some 15 countries including India for its palm plantations and other industries. There are already some 140,000 Indian workers in Malaysia, the highest ever, and this total could rise as India seeks job opportunities for people at home and abroad. (Reporting by Krishna N. Das in New Delhi; Additional reporting by Tanvi Mehta and Mayank Bhardwaj; Editing by Shri Navaratnam and David Holmes)
[2]
India and Malaysia look to reset relations with trade boost
That had also hit purchases of Malaysian palm oil by India, the world's biggest buyer of edible oils like palm. But the Malaysian approach has changed under Prime Minister Anwar Ibrahim, who took office in 2022 and previously told Reuters he was keen to have good ties with India. The two countries started settling trade in their own rupee and ringgit currencies in April last year, and India's palm oil imports from Malaysia has also increased. "With the support of Prime Minister Anwar Ibrahim, there has been a new momentum and energy in our partnership," Modi said, as Anwar stood by his side during his first visit to New Delhi as prime minister. "Today we have decided that our partnership will be elevated to a 'Comprehensive Strategic Partnership'. We believe that there is still a lot of potential in economic cooperation. Bilateral trade and investment should be expanded." Modi noted that Malaysia had invested $5 billion in India in the past year and identified semiconductors, financial technology, the defence industry and artificial intelligence as areas of possible cooperation. Anwar said his country would reinvigorate relations with India in all fields and that their potential had not been tapped in the past few years. Indian foreign ministry official Jaideep Mazumdar told a press conference the country would make a one-off export of 200,000 metric tons of non-basmati rice to Malaysia, making an exception to a ban on such shipments. Mazumdar said India is also keen to sell defence equipment to Malaysia, as well as aircraft manufactured by state-run Hindustan Aeronautics Ltd. The two countries also agreed a framework for the welfare of Indian workers going to Malaysia, which sources labour from some 15 countries including India for its palm plantations and other industries. There are already some 140,000 Indian workers in Malaysia, the highest ever, and this total could rise as India seeks job opportunities for people at home and abroad. (Reporting by Krishna N. Das in New Delhi; Additional reporting by Tanvi Mehta and Mayank Bhardwaj; Editing by Shri Navaratnam and David Holmes)
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India and Malaysia are working to reset their relationship by focusing on boosting trade and economic ties. The two countries aim to increase bilateral trade to $25 billion by 2025 and are exploring opportunities in various sectors.
Renewed Focus on Bilateral Relations
India and Malaysia are taking significant steps to reset and strengthen their bilateral relations, with a primary focus on enhancing trade and economic cooperation. This renewed effort comes as both nations recognize the potential for mutual growth and development through increased partnership
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.Ambitious Trade Targets
The two countries have set an ambitious target to boost their bilateral trade to $25 billion by 2025. This goal represents a substantial increase from the current trade volume, which stood at $19.6 billion in 2022-23
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. The commitment to this target underscores the seriousness with which both nations are approaching their economic relationship.Key Sectors for Cooperation
Several sectors have been identified as potential areas for increased cooperation and trade:
- Palm oil: Malaysia, as the world's second-largest producer of palm oil, sees India as a crucial market for this commodity
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. - Defense: Both countries are exploring opportunities in defense cooperation, including potential joint ventures
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. - Digital economy: There is a growing interest in collaboration within the digital sector, leveraging the strengths of both nations in technology and innovation
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. - Energy: Discussions are underway to enhance cooperation in the energy sector, particularly in renewable energy
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High-Level Engagements
The push for stronger ties is evident through recent high-level engagements between the two countries:
- Malaysian Foreign Minister Zambry Abdul Kadir's visit to New Delhi in April 2023
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. - Indian External Affairs Minister S. Jaishankar's visit to Malaysia in May 2023
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These visits have provided platforms for in-depth discussions on various aspects of bilateral relations and have set the stage for future collaborations.
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Overcoming Past Challenges
The current efforts to strengthen ties come after a period of strained relations between India and Malaysia. Previous tensions arose due to differences over issues such as Kashmir and palm oil trade
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. However, both nations now appear committed to moving past these challenges and focusing on areas of mutual benefit and cooperation.Future Prospects
As India and Malaysia work towards resetting their relationship, there is optimism about the potential for growth in various sectors. The emphasis on economic cooperation, coupled with diplomatic engagements, suggests a promising future for bilateral relations between these two important Asian economies
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. The success of this reset could have significant implications for regional trade and cooperation in the broader Indo-Pacific region.References
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