The Hindu Business Line : India, Malaysia mull pact on economic co-operation

Closer ties: The Malaysian Minister of International Trade and Industry, Dato’ Seri Rafidah Aziz, and the Minister for Commerce and Industry, Mr Kamal Nath, at a seminar on Malaysia - India Business Opportunities in the Capital on Monday. — Kamal Narang

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New Delhi, Nov 26 India and Malaysia are considering an India-Malaysia Comprehensive Economic Co-operation Agreement (CECA) from January 2008, said Mr Kamal Nath, Minister of Commerce and Industry at a seminar here.

The seminar, ‘Malaysia India Business Opportunities’, was jointly organised by the Ministry of International Trade and Industry, the Malaysia External Trade Development Corporation, the Malaysian Industrial Development Authority and the Confederation of Indian Industry (CII) on Monday.

“I am confident that this agreement would take our bilateral relations to newer heights and would contribute to the growth of our economies,” said Mr Nath. To take the trade and investment relations forward, India and Malaysia have set up a Joint Study Group (JSG), which has recommended the establishment of CECA that would serve as a plausible institutional framework to provide significant economic benefits to both countries, he added.

Big ASEAN investor

Malaysia ranks as the 23rd largest overall investor and the second largest investor from ASEAN with a total foreign direct investment (FDI)of $142.98 million during the period between August 1991 and July 2007, said the Minister. India’s exports to Malaysia during 2006–07 stood at $1.3 billion and imports from Malaysia at $5.3 billion. A joint study has indicated that bilateral trade could catapult to $16 billion by 2012, said Mr Nath.

India’s major exports to Malaysia include cathodes, meats, petroleum oils, onions and shallots, chemicals, cereals, yarns, garments, iron and steel, while imports include petroleum oils, palm oils, electronic goods, chemicals and yarns, informed Mr Nath.

Ms Dato’ Seri Rafidah Aziz, Minister of International Trade and Industry, Malaysia, said that Indian professionals has assumed a key role in Malaysia’s economic development as they account for 19.6 per cent of expats. India is Malaysia’s ninth largest global trading partner, amounting to Rs 288.6 billion with a growth of 23.7 per cent over the previous year.

Indian projects

Four Indian projects have been approved with investments of Rs 20,450 million from January to September 2007, said the Malaysian Minister. She said that paper, printing, fabricated metal products, chemicals and chemical products, metal and wood products were main areas of investments for Indian companies.

Ms Dato’ Aziz said that Malaysia looked forward to collaborate with Indian institutions . On tourism, she said that the MoU on Air Services signed in September will provide further impetus and facilitate ‘open skies’ agreement.

Intra-industry trade

The two countries also identified petroleum and gas, processed food, animal feed, petrochemical, oleo chemicals and medicine as potential sectors for intra-industry trade. Healthcare, education, IT and telecommunications, financial, tourism, architectural, construction and engineering were other key areas for collaboration.

On the Doha Round, the Malaysian Minister said that even at the multilateral level, the two countries must continue to engage effectively.

Mr Gautam Thapar, Chairman, Ballarpur Industries Ltd proposed the formation of the CII-CEO’s core group that would undertake an annual visit to Kuala Lumpur and organise an India-Malaysia Forum.