Why in the News?

The Prime Minister of Malaysia paid a State visit to India.

Key Outcomes of the visit

• Comprehensive Strategic Partnership: Enhanced Strategic Partnership established in 2015 was elevated to Comprehensive Strategic Partnership. 
• Malaysia joining IBCA: Malaysia decided to join the International Big Cat Alliance (IBCA) as its founding member.
  • IBCA launched in 2023 to mark the 50^th anniversary of Project Tiger aims to reach out to 97 range countries covering the natural habitats of seven big cats (Tiger, Lion, Leopard, Snow Leopard, Cheetah, Jaguar and Puma). 
• Digital technology Cooperation: MoU on Digital Technologies was signed and endorsement of early convening of Malaysia-India Digital Council. 
  • The Council will guide engagement in areas like Digital Public Infrastructure, digital B2B partnership, digital capacity building, cyber security, emerging technologies such as 5G, quantum computing,
• India-Malaysia Startup Alliance: To strengthen startup ecosystems in both nations.
• Support for review of AITIGA:  Both countries agreed to support and expedite the review process of the ASEAN-India Trade in Goods Agreement (AITIGA) to make it more trade-facilitative and beneficial for businesses. 

Importance of Malaysia for India

• Geopolitical Alignment: Malaysia's stance against Chinese demands for withdrawal of its plan for oil and gas exploration in an oil-rich maritime area off Sarawak state on Borneo Island in the South China Sea demonstrates its commitment to maintaining sovereignty. 
  • This aligns with India's vision for a free, open, and inclusive Indo-Pacific region. 
• India’s Act East Policy: Malaysia holds a crucial position in expanding India’s trade with ASEAN, aligning with India’s Act East Policy, and supporting ASEAN’s Indo-Pacific Perspective (AOIP) and the Indo-Pacific Initiative (IPOI).
• Securing Sea Lines of Communication (SLOC): Malaysia's proximity to the crucial Strait of Malacca enhances its importance in securing strategic SLOC for securing vital trade and strategic routes in the Indian Ocean Region. 
  • Also, as Strait of Malacca is closer to Andaman Sea it is vital for internal security of India. 
• Cooperation on international platforms: India sees Malaysia as a strong Global South partner. Malaysia’s has participated in all three editions of the Voice of the Global South Summit (VOGSS) led by India. 
  • Recently, India also agreed to work with Malaysia on its request to join the BRICS grouping. 

About India-Malaysia Relations

• Background: India established diplomatic relations with the Federation of Malaya (predecessor state of Malaysia) in 1957.
• Economic:  Bilateral trade reached $20.01 billion in FY 2023-24, making Malaysia India's 16th largest trading partner. Malaysia is India's 3rd largest trading partner in ASEAN.
  • Key initiatives include the Joint Committee Meeting of the Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA), efforts to promote trade in local currencies, and central bank cooperation.
• Oil palm diplomacy: Malaysia contributes three million metric tonnes of palm oil out of the 9.7 million tonnes India imports every year. 
  • Malaysia has expressed its willingness for providing services like research and development, seed supply and partnership management experience to India’s National Mission on Edible Oils. 
• Defence Cooperation: Scope of existing bilateral cooperation includes joint ventures, joint development projects, procurement, logistic and maintenance support and training. 
  • Malaysia-India Defence Cooperation Committee (MIDCOM) meets regularly to review the progress in defence cooperation on an annual basis.
  • First regional office of HAL was also inaugurated in Kuala Lumpur 2023. 
• People-to-people connect: Malaysia houses over two million people of Indian origin, the third-largest diaspora after the United States and the United Arab Emirates.

Challenges in India-Malaysia Relations:

• Weak Economic Cooperation: India-Malaysia trade is much smaller compared to Malaysia-China trade, which exceeds $100 billion. India's export restrictions on rice, sugar, and onions have affected Malaysia’s food security.
• Defense Geopolitics: India struggles to secure defense deals with Malaysia. In 2023, Malaysia chose South Korea's FA-50 jets over India's Tejas, despite it being cheaper and adaptable to both Russian and Western weapons. 
• Political Tensions: Malaysia's criticism of India's actions in Kashmir and the Citizenship Amendment Act strained relations. 
• Extradition Issues: Malaysia has repeatedly denied India's extradition requests (of Zakir Naik) since 2017, causing friction. 
• China Relations: Malaysia prefers quiet diplomacy with China, avoiding public confrontations and focusing on discreet negotiations, particularly over the South China Sea. 
  • China is also involved in developing Malaysia's Melaka deep-sea port project to undermine Singapore or cutting a canal through the Isthmus of Kra to bypass the Malacca Strait.
• Labour Exploitation: Indian migrant workers face harassment and exploitation in Malaysian farms, raising concerns about bonded labour.

Way ahead for improving India Malaysia relations

• Deepening economic cooperation: Initiatives like avoiding double taxation, customs cooperation, better air connectivity, and airline collaborations can boost trade and tourism. 
  • Early conclusion of review of AITIGA, a strong diaspora, younger population compared to China, and rapid digitization bode well for enhancing mutual trade prospects in the future.
    • ASEAN is one of the major trade partners of India with a share of 11% in India’s global trade. The upgradation of AITIGA will further boost bilateral trade.
• Strengthening Defense Cooperation: Geopolitics play a key role in such defence contacts. Therefore, India’s foreign policies and outreach should also deepen defence cooperation in line with South Korea’s New Southern Policy (NSP). 
  • During the recent meeting both countries agreed to sharing of information and best practices to counter terrorism and other traditional and non-traditional threats to address the linkages between terrorism and transnational organized crime.
• Collaborating on India-led Initiatives: Malaysia can be brought into India’s global initiatives like International Solar Alliance to strengthen ties.
• Soft power 
  • Traditional Medicines: They have agreed for establishment of the Ayurveda Chair by India’s Institute for Training & Research in Ayurveda (ITRA) Malaysia and also agreed to conclude the MoU on Pharmacopoeia cooperation at an early date.
  • Cultural Diplomacy: Malaysia, with its large Buddhist population, can play a key role in India's tourism efforts, like the ‘Buddhist Circuit’ initiative, which connects heritage sites for Buddhist tourists. 
    • Discussions for establishment of Tiruvalluvar Chair of Indian Studies in Malaysia have started.