India-Malaysia Relations

The establishment of India’s diplomatic relations with Malaysia took place in 1957. Recently, the relations between India-Malaysia are being debated following a diplomatic row over India’s ban on export of Palm Oil from Malaysia. The ban was lifted by India in 4 months. It is important for IAS Exam aspirants to understand the India’ international relations for the preparation of Mains General Studies Paper-II.

Latest Developments in India-Malaysia Relations

India’s Palm Oil Import from Malaysia – India had earlier banned the palm oil imports from Malaysia leading to the fall of 50 percent (2019 – 1.1 million tonnes) from January to February 2020. Later, the curb was lifted following the formation of a new government in Kuala Lumpur. Read about India’s Trade Diplomacy with Malaysia in the linked article.

Overview of India-Malaysia Relations

Malaysia is one of the important countries for India’s Look East Policy and Act East Policy. The two countries have close political, economic and socio-cultural relations. Learn about both these policies from the links below:

Learn about India’s international relations with other countries from the links provided below:

The major sectors of cooperation between India and Malaysia are:

1. Economy
2. Defence
3. Military

The cooperation is strengthening in various other sectors like:

1. Politics
2. Bilateral trade
3. Defence and security
4. Tourism
5. Education
6. Health
7. Human resources
8. Public administration

Let’s read about them one-by-one below:

India-Malaysia Economic Cooperation:

The economic and commercial cooperation between both the countries are an important mainstay of the bilateral relationship between India and Malaysia.

The points to note are:

1. In fiscal year 2019, Malaysia stood as the third largest trading partner of India within the Association of Southeastern Asian Nations (ASEAN). (Learn about ASEAN from the linked article.)
2. India-Malaysia Comprehensive Economic Cooperation Agreement (CECA)
   • The agreement was signed between former Indian Prime Minister Dr. Manmohan Singh and Malaysian Prime Minister Najiz Razak in 2011.
   • It covers goods, services and investments.
   • The aim of CECA was to strengthen economic ties between both nations.
3. India-Malaysia CEOs Forum
   • It was established in 2010.
   • It consists of 18 CEOs from both countries.
   • The aim of this first-ever CEOs Forum was to strengthen partnership and cooperation at business levels between India and Malaysia.
   • The latest meeting of India-Malaysia CEOs Forum was in 2017.

India-Malaysia Bilateral Trade

India is one of the top 10 largest trading partners of Malaysia; while Malaysia is India’s 13th largest trading partner in the world.

1. India’s exports to Malaysia has increased from 3.98 billion USD in 2011-12 to 6.43 billion USD in 2018-19.
2. India’s imports from Malaysia has increased from 9.47 billion USD in 2011-12 to 10.81 billion USD in 2018-19.
3. The overall bilateral trade between India-Malaysia stands at 17.24 billion USD in 2018-19.

What does India export to Malaysia?

The list of main export-items from India to Malaysia are given in the table below:

What does India import from Malaysia?

The list of main import-items in India from Malaysia are given in the table below:

Investments

Department of Promotion of Industry and Internal Trade (DPIIT) mentions the following:

1. Malaysia is the 24th largest investor in India.
2. Between April 2000 and March 2019; the FDI inflow from Malaysia stood at 932.29 million USD. It constitutes 0.22 percent of the total FDI inflows.
3. The investment from Malaysia is driven towards sectors like infrastructure and construction.

As per the Ministry of Internal Trade and Industry (Malaysia); Indian investments in the country created 27042 jobs in Malaysia as of December 2018. The Indian companies have invested in 258 approved manufacturing projects of Malaysia.

India-Malaysia Defence Cooperation

MoU on Defence Cooperation was signed by the two countries in 1993. There is a growing cooperation in the manufacture of defence products. The Indian and Malaysian Navies participate in Milan Exercise which is held every two years.

Education

A MoU on higher education was signed in India on the visit of former Malaysian Prime Minister’s Najib’s visit in 2010.

There are 2000 Indian students in Malaysia and 4000 Malaysian students in India. The most number of students from Malaysia belong to the medical field.

India’s Indian Council of Cultural Relations (ICCR) in 2019-20, has provided two slots for Malaysian students under its General Scholarship Scheme (GSS.)

Medicine

The two nations signed an MoU in the field of traditional systems of medicines in 2010. Malaysia practises Ayurveda, Siddha, Unani and Homoeopathy.

Cultural Cooperation

Netaji Subhash Chandra Bose is the name of the ICCR’s Indian Culture Centre which is located in Kuala Lumpur. It was established in 2010. Classes in Carnatic Vocal, Kathak dance, Yoga, Hindi language and Tabla are undertaken by the faculties coming from both nations.

As a part of India’s Pravasi Bhartiya Divas (PBD), Malaysia is the country to send the largest contingent to it. Around 527 people from Malaysia participated in PBD, 2019. As of December 2020, there are six Pravasi Bharatiya Divas Awardees, hailing from Malaysia.

Tourism/Civil Aviation Cooperation between India and Malaysia:

As per MEA’s official data, a total number of 224 flights are active weekly that connect 19 Indian cities with Malaysia. Indigo is the only Indian carrier to fly to Malaysia.

• A bilateral agreement was signed in 2017 to increase the seat capacity to six major destinations in India.
• India is the sixth largest source country for inbound tourism to Malaysia with over 6,00,000 Indian tourists visiting Malaysia in 2018. Malaysia was the sixth largest source country for foreign tourists visiting India with 3,22,126 Malaysian tourists. An MoU on Tourism was signed during our PM’s visit to Malaysia in 2010.

Aspirants of UPSC can go through the following links to assist themselves and prepare even better-

Important Bilateral Agreements between India and Malaysia

The following are the important India-Malaysia bilateral agreements:

Memorandum of Understanding (MoUs):

1. MoU on Defence Cooperation (1993)
2. MoU between Security Commissions of Malaysia and India (1993)
3. MoU on Employment and Welfare of Workers (2009)
4. MoU on Cooperation in the field of Higher Education (2010)
5. MoU on Cooperation in Renewable Energy (2012)
6. MoU on Cooperation and Mutual Assistance on Custom Matters (2013)
7. MoU on Tourism (2013)
8. MoU on Cooperation in the field of Traditional Systems of Medicine (2013)
9. MoU on Cooperation in IT & Services (2013)
10. MoU on Cyber Security (2015)
11. MoU on Cultural Exchange Program (2015)
12. MoU between NITI AAYOG and PEMANDU (2015)
13. MoU on Cooperation in the Field of Sports (2017)
14. MoU between Malaysian Palm Oil Board (MPOB) and Institute of Chemical Technology (ICT), India (2017)
15. MoU on Mutual Recognition of Educational Degrees and Certificates between AIU and MQA (2017)
16. MOU on UN Linkages with Malaysia (2018)

Agreements:

1. Agreement on Promotion & Protection of Investment (1995)
2. Agreement on Double Taxation (2001)
3. Cooperation relating to provision of Technical Assistance Services on Highway Management & Development (2010)
4. Revised Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (2010)
5. Comprehensive Economic and Cooperation Agreement (CECA) (2010)
6. Bilateral Extradition Treaty (January 2011)
7. Mutual Legal Assistance Treaty (2012)
8. Revised Air Services Agreement (2017)

India-Malaysia: Important Bilateral Institutional Mechanisms

As per the official data made available by the Ministry of External Affairs (MEA); some of the important bilateral institutions that are established to aid the diplomatic relations between India and Malaysia are:

1. Joint Commission Meeting (JCM)
   • It is headed by the foreign ministers of both countries.
2. Foreign Office Consultations
   • It is a secretary-level meeting.
3. India-Malaysia Defence Cooperation Meeting (MIDCOM)
   • It is chaired by the secretaries of defence ministries.
4. India-Malaysia CEOs’ Forum
   • On 14th February 2019, the latest meeting of CEO’s forum took place in Kuala Lumpur
5. Other important joint working groups are:
   • Joint Working Group on Counter Terrorism and Transnational Crime
   • Joint Committee on Science and Technology
   • Joint Working Group on Information Technology
   • India-Malaysia Joint Working Group on Labour
   • India-Malaysia Joint Working Group on Higher Education
   • India-Malaysia Joint Working Group on Renewable Energy
   • India-Malaysia Joint Working Group on Public Administration
   • Bilateral Technical Meeting on Cooperation in the Field of Traditional Medicine

UPSC General Studies Paper-2 Preparation: