India–Malaysia Relations

• India established diplomatic relations with the Federation of Malaya (predecessor state of Malaysia) in 1957. India is represented in Malaysia through the High Commission of India based in Kuala Lumpur. Malaysia is represented in India through their High Commission in New Delhi and Consulates General in Mumbai and Chennai.
• The two countries enjoyed a strong relationship in the 1960s as a result of the personal friendship between Prime Ministers Nehru and Tunku Abdul Rahman Putra.
• Presently, India and Malaysia have developed close political, economic and socio-cultural relations. There is a considerable goodwill for India in Malaysia at people to people level, which hosts the third largest PIO community in the world.
• India and Malaysia are witnessing growing engagements in all aspects of bilateral relationship, including political, economic and trade, defence and security, tourism and education, health, human resources, public administration, etc.
• During the visit of former PM Dr. Manmohan Singh in 2010, it was agreed to establish a Strategic Partnership and during PM Narendra Modi visit in 2015 it was strengthened to Enhanced Strategic Partnership.
• The following institutional mechanisms have been established between India and Malaysia:
  • Joint Commission Meeting
  • Foreign Office Consultations
  • India-Malaysia Defence Cooperation Meeting
  • India-Malaysia CEOs’ Forum
• The two countries have signed a number of Agreements and Memoranda of Understanding from time-to-time in different sectors.
• 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.
• Both countries are full members of the Commonwealth of Nations, Asian Union and G15.
• A bilateral Comprehensive Economic Cooperation Agreement (CECA) covering goods, services and investment has come into effect from 1 July 2011. India and ASEAN have also signed an FTA covering goods, services and investment.
• India and Malaysia are also connected by various cultural and historical ties that date back to antiquity. The two countries are on excellently friendly terms with each other seeing as Malaysia is home to a strong concentration of Indian immigrants. Mahathir Mohamad, the fourth and longest serving Prime Minister of Malaysia has Indian ancestry.
• Following the visit by then Prime Minister Najib Razak in 2017, both India and Malaysia agreed to expand co-operation in new chapter in areas like infrastructures development and building of smart cities.
• Many in the Indian government and their community feel the ties under 7th Malaysian Prime Minister Mahathir are decreasing since he favours Pakistan.

Areas of Cooperation

Agreements and MoUs:

• Several Agreements and MoUs have been signed between the two countries, including in the field of Commerce, Avoidance of Double Taxation, Customs matters, Higher Education, Extradition, Mutual Legal Assistance in Criminal Matters, Tourism, Traditional medicine, IT and services, Cultural Exchange Programme, Public Administration and Governance, Air Service Agreement to name a few.

Defence and Security Cooperation:

• A MOU on Defence Cooperation was signed in 1993. India’s defence relations with Malaysia have gained momentum during recent years.
• Visits: The Malaysian Defence Minister visited India in June 2006 and in April 2017. The Indian Defence Minister visited Malaysia in January 2008 and again in November 2015 (multilateral).
• The 11th Malaysia-India Defence Cooperation Meeting (MIDCOM) chaired by the Secretaries of the two Defence Ministries, was held in Kuala Lumpur on 21th November 2018.
• Previously, the 6th Army to Army Staff Talks were held in May 2017 in Kuala Lumpur. The 8th Air Force to Air Force Staff Talks were held in Kuala Lumpur on 14-16 February 2018.
• Further, the 7th Navy to Navy Staff Talks were held in July 2018 between both the nations. 
• Enhancing the air reconnaissance capacity, the Indian Air Force Pilots trained Malaysian counterparts on Su–30 MKM aircrafts in 2008-2010, of which the initial phase of the training was conducted in India and final phase in Malaysia.
• Both nations also share a strong bond in helping each other at the time of exigency. 
• Subsequently, India also deployed C130J and P8I Search and Rescue (SAR) aircraft to assist in search of the Malaysian aircraft.
• Joint training exercises ‘Harimau Shakti’ are held annually between the two countries and there is scope for its upgradation.

Security Cooperation:

• On the security cooperation side, India and Malaysia cooperate to maintain freedom of navigation and overflight under the “United Nations Convention on the Law of the Sea (UNCLOS)” for Free Navigation and Safety Cooperation over the South China Sea and the Indian Ocean.
• India-Malaysia also has close cooperation on regional security matters – a Joint Working Group (JWG) was established in 2010 by both countries to deal with terrorism threats.

Economic and Commercial Cooperation:

• India and Malaysia signed Comprehensive Economic Cooperation Agreement (CECA) on 1 July 2010, which came into force from 1st July 2011.
  • It covers goods, services and investments.
  • The aim of CECA was to strengthen economic ties between both nations.
• India has signed the Free Trade Agreement (FTA) in services and investments with the 10-member Association of Southeast Asian Nations (ASEAN) in September 2014.
• India-Malaysia CEOs Forum 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.
• In fiscal year 2019, Malaysia stood as the third largest trading partner of India within the Association of Southeastern Asian Nations (ASEAN).
• Bilateral trade between India and Malaysia is significantly biased in favour of Malaysia.
• In 2018-19, the bilateral trade was US$ 17.24 billion, with India’s exports being US$6.43 billion and imports being US$ 10.81 billion.
• Malaysia has emerged as 13th largest trading partner for India while India figures among the ten largest trading partners for Malaysia.
• As DPIIT, Malaysia ranks as the 24thlargest investor in India with FDI inflow of US$ 932.19 million which constitutes 0.22% of total FDI inflows of US$ 421 billion into India during the period April 2000 to March 2019.

Connectivity and Tourism:

• India is the sixth largest source country for inbound tourism to Malaysia with around 7 lakhs Indian tourists visited Malaysia in 2015 against 9 Lakhs in 2014.
• Malaysia is the tenth largest source country for foreign tourists visiting India with an estimated 1.6 lakhs Malaysian tourists visited India in 2015 against 2 lakhs in 2014: An MoU on Tourism was signed during our PM’s visit to Malaysia in 2010.

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.)
• India’ Indian Technical and Economic Cooperation (ITEC) Program:
  • It is a bilateral programme of assistance that was introduced in 1964.
  • The aim of the ITEC programme is to aid India’s integrated forein policy.
  • It includes training of nominees from ITEC partner countries.
  • It also fosters study tours, gifts/donations of equipment, aid for disaster relief etc.
  • For 2019-20; India has offered 30 slots for Malaysia under its ITEC Program.
• India’s AYUSH Scholarship Scheme:
  • Malaysia has been provided with 20 seats for those students who aspire to pursue Bachelor degree in Ayurveda, Siddha, Unani and Homeopathy medicine in Indian institutions or colleges under the Ministry of Ayush.
• Indian Scholarship and Trust Fund (ISTF):
  • Former Indian Prime Minister Jawaharlal Nehru created ISTF in 1964.
  • The aim of ISTF is to assist Malaysia-Indian students annually.
  • In 2015, PM Narendra Modi provided an additional grant of RM 3 million to this fund.
  • For 2019-20, 55 Malaysian-Indian students studying in Malaysia have been benefited through the scholarships provided using this fund.

Cultural Links:

• Indian Cultural Centre, Kuala Lumpur, under ICCR was established in February 2010 and conducts classes in Carnatic Vocal, Kathak dance, Yoga, Hindi language and Tabla by trained teachers from India and Malaysia.
• India and Malaysia signed an MoU on cooperation in the field of Traditional Medicine in October 2010.

Traditional medicine:

• India and Malaysia have signed a MoU on cooperation in the field of Traditional Medicine in October 2010.
• The Government of Malaysia has been working to popularize AYUSH (Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy) systems in Malaysia.
• AYUSH systems are practiced in Malaysia.

Indian Community:

• There are over 2,44,000 Indian expats legally employed in Malaysia in skilled and semi-skilled category.
• A bilateral MoU on Employment and Welfare of Workers signed in January 2009 establishes an institutional framework to deal with issues concerning Indian workers.
• Illegal immigration and human trafficking from India into Malaysia is a matter of concern to both Governments.

Recent Developments

• In 2017, after the visit of then Prime Minister Najib Razak to India. India and Malaysia extended their mutual agreement to expand cooperation in areas such as infrastructure development and building smart cities.
• In 2020, Malaysian Prime Minister Mahathir Mohamad spoke in opposition to the revocation of Kashmir’s special status and the passing of the Citizenship Amendment Act. India had then banned palm oil imports from Malaysia leading to a fall of 50 per cent (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.
• The year 2022 marks 65 years of establishment of “political or diplomatic relations” between both India and Malaysia.

Significance of Malaysia for India

• As a country where 7.2% of the population is of Indian origin, Malaysia assumes an important place in India’s foreign policy.
• Surrounded by busy sea lines of communications such as the Strait of Malacca and the South China Sea, Malaysia is also a key pillar of India’s Act East policy and critical to India’s maritime connectivity strategies.

Way Ahead

• The two sides should work together to reactivate bilateral mechanisms in various areas.
• India and Malaysia reviewed their whole range of bilateral relations and expressed hope for a faster recovery in the post-Covid period, taking into account both sides’ shared determination to increase collaboration in a wide range of areas. This should continue for long times to come.
• Common issues like China’s dominance should be made common ground for bettering the relationship.
• Through Act East Policy (AEP), India should further strengthen its relations and cooperation with ASEAN countries including Malaysia and other East Asian regional powers.
• Small countries like Malaysia, do not have a huge global dimension, but because of their regional location, these countries keep the chips of negotiation, which they use with countries like India and China from time to time to make their interest. To reduce the increasing Chinese interference in the Indian Ocean, India should maintain relations with Malaysia through balanced diplomacy and an economic approach.
• There is a general acceptance of Malaysia that Malaysia is considered extremely important for the successful implementation of India’s ‘Act East’ policy, but Kuala Lumpur rarely receives diplomatic and economic attention from India. India needs to change this approach; To expedite the slow implementation of their various ongoing infrastructure projects in Malaysia under the Act East Policy and pursue a policy that blends India’s economic, political and strategic imperative with Malaysia.