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INDIA-MALAYSIA RELATIONS India established diplomatic relations

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					                            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.

        India - Malaysia have traditionally been close and friendly. There have been
regular exchanges of visits between the leaders of the two countries, including the visit
by Prime Minister Dr. Manmohan Singh to Malaysia from 26 to 28 October 2010. This
followed the landmark State visit to India in January 2010 of Malaysia’s Prime Minister
Mohd Najib. Foreign Ministers of both countries head the Joint Commission, which held
its 4th meeting in New Delhi in February 2007. Commerce and Industry Minister paid an
official visit to Malaysia in July 2010, and also accompanied the PM in October 2010.
Minister of Road Transport and Highways paid an official visit in December 2010, and
Minister of Commerce and Industry visited in February 2011 to sign the Comprehensive
Economic Cooperation Agreement (CECA).

      Malaysian Deputy Prime Minister paid an official visit to India (Mumbai, Delhi and
Chennai) from 8 to 13 March 2011. He paid a courtesy call on Prime Minister
Dr. Manmohan Singh, and met External Affairs Minister, Minister of Road Transport and
Highways and Minister of HRD. Malaysian Minister for Science, Technology and
Innovation visited India from 21 to 22 February 2011, Minister of Health on 4 March
2011 and Minister for International Trade and Industry from 2 to 4 March 2011.

Prime Minister’s Visit to Malaysia: During the visit of the PM Dr. Manmohan Singh to
Malaysia from 26 to 28 October 2010, India and Malaysia have agreed to work on a
Framework for Strategic Partnership, which envisions development of a multi-faceted
relationship with a view to elevate bilateral relations to the level of a long term and
strategic partnership. The first-ever India-Malaysia CEOs Forum was jointly launched by
both the PMs. PM Dr. Manmohan Singh delivered the ‘Khazanah Global Lecture 2010”
at Putrajaya International Convention Centre on 27 October 2010. Both the PMs also
inaugurated the ‘Little India’ project in Brickfields. Following six documents were signed
during the visit:

      Agreement towards implementing Comprehensive Economic Cooperation
      Agreement (CECA) between India and Malaysia on 1st July 2010;
      MoU on Cooperation in the field of Traditional Systems of Indian Medicine
      MoU on Cooperation in the field of Tourism
      MoU on Cooperation in the field of IT & Services
      Cultural Exchange Programme (CEP) and
      Agreement between CSIR of India and UNIK of Malaysia.

Both countries also agreed to set up a Joint Working Group on Counter-Terrorism.

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 had visited India in 2006 and Indian Defence 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 eighth meeting of the MIDCOM was held in March 2010. Service Chiefs
from both countries have regularly exchanged visits; in 2009 India’s Chief of Naval Staff
visited Malaysia and the Chief of the Royal Malaysian Air Force visited India. The IAF
Training Team deployed in Malaysia trained Malaysian pilots on the SU-30SKM aircraft
for two-and-a-half years since February 2008. 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.

Economic and Commercial Cooperation: Economic and commercial relations are
emerging as the mainstay of the bilateral relationship. Malaysia is the second 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 coming-into-
force of the ASEAN-India FTA in Goods from 1 January 2010, the bilateral economic
engagement is expected to get a further fillip. During the visit of Prime Minister Dr.
Manmohan Singh in October 2010, India and Malaysia have signed an agreement
signaling the conclusion of negotiations on a Comprehensive Economic Cooperation
Agreement (CECA) as a single undertaking covering goods, services, investment and
other areas of cooperation. As a follow of this Agreement, India and Malaysia signed the
CECA on 18 February 2011 in Putrajaya during the visit of Commerce and Industry
Minister. It will now come into force on 1 July 2011

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.

Bilateral trade increased by 17 times from US $ 0.6 billion in 1992 to US$ 10.5 billion in
2008, and has more than doubled from US$ 5 billion to US$ 10.5 billion between 2005
and 2008. According to Malaysian statistics, the two-way trade in 2009 declined to US $
7.3 billion (about 28% drop with India’s exports at US $ 2.3 billion and India’s imports at
US $ 5 billion) as compared to 2008. In the Jan-October 2010, bilateral trade increased
to US $7.56 billion marking an increase of 25 % over the same period in 2009.

Based on direct investments from Malaysia to India, it is the 24th largest investor in India
with cumulative FDI inflows valued at US$ 2 billion from 1991 to 2010. In addition, about
US$ 6 billion in Malaysian investments are believed to be invested in India through the
Mauritius route. Notable among these are Maxis Communications in Aircel, Axiata in
IDEA Cellular Ltd, Khazanah in IDFC, Apollo Hospitals, Yes Bank, etc. Malaysian
construction companies’ largest presence outside Malaysia is in India. They have
completed 52 construction projects worth US$ 2.34 billion in India, while 35 projects of
similar value 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 billion, 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.

A MoU on Cooperation relating to the Provision of Technical Assistance Services on
Highway Management and Development was signed in December 2010 during the visit
of Shri Kamal Nath, Minister of Road Transport and Highways to Malaysia.

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 August 2010. India is the sixth largest
source country for inbound tourism to Malaysia with about 600,000 Indian tourists
visiting Malaysia in 2009, an increase of 9% over figures of 2008. Malaysia is the tenth
largest source country for foreign tourists visiting India with 115,794 Malaysians visiting
India in 2008. 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 legally recruited Indian workers in
Malaysia in both the skilled and semi-skilled category. In addition, there are about
10,000 professionals expatriates 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.

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 of 2 million (about 8% of
Malaysia’s population). The overwhelming numbers are Tamil speaking, with significant
people speaking Telugu, Malayalee 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 smaller splinter
political organizations have emerged. PIOs from Malaysia have been sending the
largest contingents to the Pravasi Bharatiya Divas.

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March 2011

				
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