India-Malaysia Relations

India’s External Affairs Minister recently paid an official visit to Malaysia as a step to strengthen bilateral ties and enhance strategic partnership between the two countries.

About India-Malaysia Relations:

• The India-Malaysia partnership, rooted in deep historical ties, spans defense, economics, and cultural exchanges.
• The historical ties between India and Malaysia trace back millennia, marked by linguistic, cultural, and historical connections.

Strategic ties:

• While formal diplomatic relations were established in 1957, the partnership has endured through regional crises, becoming a cornerstone of India’s engagement in the East.
• India’s foreign policy seeks a robust global role and there is a need for strategic relations for navigating the Indo-Pacific regional landscape amid China’s influence.
• Malaysia holds a crucial position in expanding India’s trade with ASEAN, aligning with India’s Act East Policy.
• With advancing maritime connectivity in the Strait of Malacca and South China Sea, both countries support ASEAN’s Indo-Pacific Perspective (AOIP) and Indo-Pacific Initiative (IPOI).

India-Malaysia Economic Ties:

• India and Malaysia share membership in key global forums like the Commonwealth of Nations, NAM, G-15, and G-77, forming a strong basis for cooperation.
• Bilateral trade reached nearly US$19.89 billion in 2022-2023, positioning Malaysia as India’s third-largest trade partner among ASEAN countries.
• While India stands as Malaysia’s largest trading partner in Southeast Asia.
• Imports from Malaysia include animal and vegetable fats, mineral fuels, electronic equipment.
• Exports from India to Malaysia comprise mineral fuels, aluminum, organic chemicals, machinery, and electronic equipment.
• Agreements like CECA-2011, FTA-2015, and IPEF promote economic cooperation, and settlement of Malaysia-India trade in Indian rupee aids in mitigating currency fluctuations.
• Areas of economic partnership include infrastructure, information technology, biotechnology, and energy.

Defense Cooperation:

• Joint exercises like Air force-Udara Shakti, Naval-Samudara Laksamana, Army-Harimau Shakti, and MILAN foster defense cooperation.
• Enhanced collaboration in defense-related science, technology, and industry, including Maintenance, Repair, and Overhaul (MRO).

Diaspora & Culture:

• Malaysia hosts around 2.77 million Persons of Indian Origin (PIOs), representing 8.5% of its population, and holds the largest Indian diaspora in Southeast Asia.
• Visa-free entry for Indian passport holders facilitates cultural exchange and tourism.
• Initiatives like Netaji Subhash Chandra Bose Indian Cultural Center (NSCBICC), offers classes in Carnatic Vocal, Kathak, Yoga, and Hindi language.

Other Segments:

• Energy collaboration includes renewable energy projects and investments worth US$4.5 billion in India.
• Technology collaboration focuses on India’s digital infrastructure and startup ecosystem, particularly in the IT sector.
• Food security and agriculture cooperation aims to enhance trade despite export bans through initiatives like rice exports.
• Unfavorable geopolitical shifts, global demand stagnation, and heightened import tariffs pose challenges to bilateral economic cooperation.
• Over the past few decades, despite occasional challenges, both nations have maintained steady cooperation in defense, politics, economics, and parliamentary exchanges.

Location of Malaysia:

• Malaysia is a country in Southeast Asia, lying just north of the Equator, that is composed of two noncontiguous regions.
• This includes Peninsular Malaysia (Semenanjung Malaysia), also called West Malaysia on the Malay Peninsula, and East Malaysia (Malaysia Timur), which is on the island of Borneo.
• It is bordered by Thailand to the north, Singapore to the south, and Indonesia to the southwest across the Strait of Malacca.