Bilateral Relations
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Overview of Bilateral Relations

India established diplomatic relations with the Federation of Malaya (predecessor state of Malaysia) in 1957.

India and Malaysia have traditionally enjoyed friendly ties. There have been regular high level exchanges between the leaders of the two countries, including recently by Malaysia's Prime Minister Mohd. Najib to India in 19 – 23 January 2010 and the Indian Prime Minister Dr. Manmohan Singh to Malaysia from 26 to 28 October 2010. The two Prime Ministers decided to establish a bilateral Strategic Partnership in October 2010 which envisions development of a multi-faceted relationship from the long term and strategic perspective. The complete text Joint Statement issued on the occasion of the Indian Prime Minister's visit and other details are available on the High Commission of India's website.

External Affairs Minister of India, Shri S.M. Krishna, visited Malaysia from 2 to 5 May 2011 to co-chair the 5th Joint Commission meeting with his counterpart, Foreign Minister Dato Seri Anifah Aman. He also met the Malaysian Prime Minister and Home Minister during this visit. Further details on the External Affairs Minister's visit can be found on the website of the High Commission of India. Other high level Ministerial visits from India in 2010 – 2011 included those by the Deputy Chairman Planning Commission in September 2010, the Minister of Road Transport and Highways in December 2010, the Minister of Commerce and Industry in February 2011 to sign the Comprehensive Economic Cooperation Agreement (CECA), the Minister of New and Renewable Energy in September 2011, and the Minister of State for Textiles in November 2011.

Malaysian Deputy Prime Minister Tan Sri Muhyiddin bin Yassin paid an official visit to India from 8 to 13 March 2011, during which he met with the Prime Minister, the External Affairs Minister, the Minister of Road Transport and Highways and Minister of HRD. Other high level visitors from Malaysia in 2011 included the Minister for Science, Technology and Innovation visited India in February 2011, the Minister of Works in February 2011, Minister of Health in March 2011 and Minister for International Trade and Industry in March 2011, and the Minister of Finance II in October 2011.

The two sides also hold regular consultations between the two Foreign Ministries at the level of Secretary / Secretary General. Both countries have agreed in principle to establish a mechanism for cooperation on counter-terrorism. A bilateral Extradition Treaty was ratified in February 2011 and a Treaty on Mutual Legal Assistance in Criminal Matters will be signed shortly.

Defence Cooperation: India-Malaysia defence relations have steadily grown over the years. A MOU on Defence Cooperation was signed in 1993. The Malaysian Defence Minister Dato Seri Mohd. Najib (now PM) had visited India in 2006 and Indian Defence Minister Shri Pranab Mukherji (now Finance Minister) visited Malaysia in January 2008. Malaysia-Indian Defence Cooperation meetings at the level of Defence Secretary from Indian side and Secretary General from Malaysian side are held regularly; the ninth meeting of the MIDCOM was held in January 2012 at Kuala Lumpur in Malaysia; The Staff Talks between the three Services are being held regularly. Service Chiefs from both countries have regularly exchanged visits; The Chief of Air Staff, Air Chief Marshal NAK Browne, PVSM, AVSM, VM, ADC made an official visit to Malaysia in February 2012; an IAF Training Team was deployed in Malaysia from February 2008 to September 2010 to train Malaysian pilots on the Sukhoi-30MKM. India participates regularly in the biennial LIMA exhibition, including the last one held at Langkawi in December 2011; Malaysia participates in the biennial MILAN event regularly. RMN participated in MILAN in February 2012 with one RMN Vessel and one Commander Naval Area; Indian navy and coast guard vessels make regular friendly port calls each year at Malaysian ports. India is also participating in the Cooperative Mechanism on the Straits of Malacca and Singapore (SOMS) and contributed to two of the six IMO Projects (Project 1 and Project 4) for enhancement of navigational safety and environmental protection in the Straits. More details are available on this website under the head India and Malaysia.

Economic and Commercial Cooperation: Economic and commercial relations are emerging as the mainstay of the bilateral relationship. Malaysia is the third largest trading partner for India within ASEAN, and India is the largest trading partner for Malaysia from among the countries of the South, excluding China. With the entry-into-force of the Malaysia-India Comprehensive Economic Cooperation Agreement (CECA) as a single undertaking covering goods, services, investment and other areas of cooperation, on 1 July 2011, the bilateral economic engagement is expected to get a further fillip. Click Here to view CECA Agreement.

The two sides are finalizing the Revised Double Taxation Agreement, which was signed in May 2012 and a MoU on Cooperation in the Field of Customs is expected to be signed shortly.

The first-ever India-Malaysia CEOs Forum, comprising 18 CEOs from both sides, was jointly launched on 27 October 2010 by Prime Ministers Dr. Manmohan Singh and Dato' Seri Mohd Najib to develop enhanced partnership and cooperation at the business level. The Second and Third meetings of the CEOs Forum took place in Mumbai and Kuala Lumpur on 20 May 2011 and 22 November 2011 respectively. The fourth meeting of the Forum was held in Johor Bahru on 08 June 2012. The fifth meeting of the Forum was held in New Delhi on 19 December, 2012.

Bilateral trade has increased from US$0.6 billion in 1992 to US$12.5 billion in 2011. The trade has more than doubled from US$5 billion to US$12.5 billion between 2005 and 2011. In 2011, bilateral trade has shown robust growth of 32.7% year-on-year to reach US$12.5 billion (as compared to US$ 8.98 billion for the last year). Trade remains significantly imbalanced in favour of Malaysia (India's exports are US$ 3.32 billion, Malaysian exports are US$ 9.20 billion). As per latest trade figures, during the period January to October 2012, the total bilateral trade is US$ 10.92 billion, an increase of 4.5% over the figures for corresponding period of last year (India's exports are US$ 3.25 billion, Malaysian exports are US$ 7.67 billion).

Based on direct investments Malaysia is the 27th largest investor in India with cumulative FDI inflows valued at US$ 298.80 million from April 2000 to June 2011. In addition, more than US$ 6 billion in Malaysian investments are believed to be invested in India through the third country route. Notable among these are Maxis Communications in Aircel, Axiata in IDEA Cellular Ltd, Khazanah in IDFC, Apollo Hospitals, Yes Bank, etc. The largest presence of Malaysian construction companies outside Malaysia is in India. They have completed 69 construction projects worth US$ 3.5 billion in India, while 19 projects worth 2.4 billion are under various stages of implementation. Under a partnership with Malaysian Airports, GMR completed airport in Hyderabad in 2008, and the second one in Delhi in July 2010.

Indian companies have invested about US $ 2.04 billion (from 1980 to 3rd quarter 2011), making it the 7th largest investor in Malaysia. Indian companies that made major acquisitions include Reliance Industries Limited, Ballarpur Industries Limited, Larsen & Toubro and WIPRO. There are over 100 Indian companies including 60 Indian joint ventures operating in Malaysia. In addition, there are 60 Indian IT companies operating from Malaysia. IRCON International Ltd. has been actively engaged in the development of railways in Malaysia since 1988, and it is currently executing a double tracking project (Seremban – Gemas) worth over US $1billion. Further details of bilateral economic cooperation are also available in the India and Malaysia section of the website.

Tourism & Connectivity: Air links have improved significantly following a bilateral agreement in 2007 to progressively increase the seat capacity to six major destinations in India and a provision for multiple destinations and designating any number of airlines to operate on the India–Malaysia routes. At present, there are 114 flights between two countries, of which 93 are operated by Malaysian airlines and 21 by Indian airlines. Regular meeting of the Civil Aviation Ministries are held to liberalize the connectivity, and the last meeting was held in Kuala Lumpur in October 2011. India is the sixth largest source country for inbound tourism to Malaysia with about 693,056 Indian tourists visiting Malaysia in 2011. Malaysia is the tenth largest source country for foreign tourists visiting India with 199,128 Malaysians visiting India in 2011. With the signing of the MoU for cooperation in the field of tourism, there would be greater people-to-people contact and also greater flow of tourists from both the countries.

Labour& Expatriates: There are about 150,000 Indian workers in Malaysia in both the skilled and semi-skilled category. This includes about 10,000 expatriates who are employed in IT, manufacturing, banking, etc. A bilateral MoU on Employment and Welfare of Workers signed in January 2009 establishes an institutional framework to deal with issues concerning Indian workers. Two Joint Working Group meetings at the Secretary-level were held in March 2009 and April 2010.

Education & Cultural Cooperation: About 2000 Indian students are studying in Malaysia, while an estimated 3000 Malaysian students are studying in India. An MOU on Higher Education was signed on 20 January 2010 during Prime Minister Dato' Seri Najib's visit to India. India offers about 30 slots under ITEC and 25 under the Colombo Plan. A new Indian Cultural Centre (ICC) has been opened in Kuala Lumpur on 10 February 2010 to promote cultural relations with Malaysia. A Cultural Exchange Programme (CEP) for 2010-13 was signed on 27 October 2010 during the visit of Prime Minister Dr. Manmohan Singh to Malaysia.

People-to-People exchanges have also expanded with the signing of the Cultural Exchange Programme for 2010 – 2013; with the establishment of an Indian Cultural Centre in Kuala Lumpur in February 2011; with the establishment of a Joint ICT Talent Development Committee in February 2011; and with the holding of the 2nd bilateral Joint Committee for Science & Technology in July 2011. The Parliament of India has constituted an India-Malaysia Parliamentary Friendship Group headed by Shri Lalji Tandon MP as its President in October 2011. The 150th birth anniversary of Rabindarnath Tagore was also marked in May – June 2011 by several events in Malaysia.

Regional and Multilateral: India and Malaysia cooperate in a number of multilateral and regional foras such as UN, NAM, WTO, ASEAN, ARF, East Asia Summit (EAS), Commonwealth, Indian Ocean Rim for Regional Economic Cooperation, etc.

Persons of Indian Origin (PIOs): Malaysia has one of the largest communities of Persons of Indian Origin in the world, numbering close to 2 million (about 8% of Malaysia's population). The overwhelming numbers are Tamil speaking, with significant people speaking Telugu, Malayalam and Punjabi also. The Malaysian Indian Congress is the dominant political organization of the PIOs since pre-independence, and a member of the ruling coalition since independence, but of late several other political organizations have also emerged. Today there are good number of Members of Parliament and Ministers of the State Governments of Indian origin from both the ruling and opposition parties. Malaysia have been sending one of the largest contingents to the annual Pravasi Bharatiya Divas events since its inception in 2001, and four Malaysians – Dato Seri S. Samy Vellu, Tan Sri Somasundaram, Tan Sri Vadiveloo and Tan Sri Ajit Singh have been honoured with the Pravasi Bharatiya Samman Award.


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