Multidimensional Indo-Malaysian Strategic Partnership

Honoring the invitation of Prime Minister Modi, Prime Minister of Malaysia Najib Tun Abdul Razak was on state visit to India from March 30^th to April 4^th. In his six-day long trip, accompanied by 12 cabinet Ministers and 80-100 business leaders Razak met Indian investors apprising them of potential opportunities in Malaysia. He oversaw Malaysian infrastructure investments in Tamilnadu, Andhra Pradesh and Rajasthan. He met President Pranab Mukherjee, Vice president Hamid Ansari and held bilateral meetings with Prime Minister.

Amongst South East Asian Nations, India has a distinct friendly relationship with Malaysia. Besides the historical trade and cultural connections, both countries in the contemporary times have so many complementarities (democracy, multiculturalism, and pluralism) and convergent interests. Both emerging economies, thriving democracies and potentially uphold secular credentials. Commemorating 60 years of establishment of diplomatic ties, and 25 years of dynamic economic cooperation with ASEAN (Association of South East Asian Nations) leaders of both countries have focused their attention on Economic cooperation, cooperation in counter terrorism operations with defence and security cooperation. Razak, son of the second Prime Minister of Malaysia Abdul Razak Hussein and nephew of third Prime Minister Hussein bin Dato Onn, on his third visit after becoming Prime Minister of Malaysia in 2009 appreciated the dynamic leadership of Modi and infused fresh dynamism to strategic partnership established in 2010.

Apart from stressing the importance of bilateral Comprehensive Economic Cooperation Agreement (CECA), India and Malaysia signed seven agreements and 31 business MoU’s. These include enhanced cooperation in education, training, research; recognition of each other’s educational degrees; palm oil production; cyber security; defence personnel exchange and training; air connectivity, sports and development of urea and ammonia manufacturing plant in Malaysia and off-take of surplus urea from Malaysia to India. This project worth $2 billion with a production capacity of 2.5 million tons per year can meet the increasing demands of Indian market. Further the Malaysian firm MIGHT Technology Nurturing signed an MoU with Andhra Pradesh Economic Development Board (APEDB) on the implementation of Fourth Generation Technology Park at the state’s new capital Amravati. This project expected to attract investments to the tune of $100 million besides catalyzing growth of 75 Small and Medium Enterprises (SME) can create 5500 jobs. Government of Andhra Pradesh and PEMANDU of Malaysia signed a MoU in performance management, project delivery and monitoring.

Economic cooperation has been the core component of Modi’s foreign policy. Giving major thrust to trade and economic links both countries signed deals worth 36 billion of which over $30 billion will be executed in India and rest in India. Important deals include those between Andhra Pradesh Gas Distribution Corporation and Adani Ports with Malaysian Industries and a $23 billion deal for development of integrated Maritime City on Carey Island South of Malaysia. Najib called for speedy conclusion of free trade pact with ASEAN and six other countries i.e.., Regional Comprehensive Economic Partnership (RCEP). Besides, 10 ASEAN countries, the partnership includes- China, India, Australia, Japan, South Korea, and New Zealand. With US pulling out of the TPP (Trans Pacific Partnership), a trade agreement among Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. ASEAN countries are now very keen on expediting RCEP. Trump protectionist trigger dismantled TPP causing its abandonment. The next big economic agreement on cards is RCEP. Official talks for formalization of RCEP which includes 16 countries, affecting lives of 3 billion people of combined GDP of $17 trillion, accounting for 40% world trade began in 2012 at Phonm Penh. RCEP extensively covers investments, goods, services, intellectual rights, economic and technical cooperation. Disgruntled ASEAN nations after the fall out the big trade agreement is now enthusiastically vying for roll out of RCEP. With the bilateral trade with ASEAN nations and China largely in their favor, India is nimble-footed about RCEP. The trade imbalances especially with China are reaching unprecedented levels and India is not keen on RCEP. India has an edge in service sector but ASEAN countries are reluctant to issue migration clearances in service sector. On the other hand, Indian manufacturing sector as of now is not able to compete with China. While economic cooperation can be the forte for bolstering bilateral ties, India has huge trade deficits with countries like Japan, Indonesia, Malaysia, South Korea and Australia. On the contrary, India with its huge market potential is cynosure of all countries in RCEP. Lower tariffs earlier had benefitted foreign countries while India failed to avail the benefits of the same in foreign markets. As of now, India-Malaysia joint forum of CEO’s recommended visa-free travels to boost economic growth through travel and tourism. Prudently, Razak liberalized visa regimes, waived visa fees, launched multiple-entry e-visas for Indian tourists allowing them to travel to Malaysia, Indonesia, Singapore, and South Thailand (valid for 15days). Even promised visa approval applications within 48 hours. Malaysia is currently the third largest trading partner among ASEAN after Indonesia and Singapore. Bilateral trade as of 2015 stands at $12.5 billion in favor of Malaysia. Malaysian investments in India are $7 billion as against reciprocal Indian investments of $2.5 billion. Indian Diaspora in Malaysia account for 7.5% of the population and with sections of Malaysian society are coming under Chinese influence, it is time India makes every attempt to build strong relations with regional states.

Another issue of key focus in the bilateral meet was counter-terrorism. In the joint statement both leaders reinforced the need for curtailing terrorism in all forms and manifestations. They condemned incidence of barbaric terror attacks in the region in strongest terms and emphasized the need to counter the spread of terrorism, radicalization, and growing extremism. Prime Minister Modi commended the steps taken by Malaysian government to countering terrorism and sought continuous cooperation for joint anti-terrorism operations. Malaysia in turn promised to share valuable experiences on mass de-radicalization with India. Both sides called upon the International community to strengthen multilateral forums that can address the challenges posed by terrorism. Reaffirming that extremism has been the root cause of terrorism, both sides ascertained the need for moderation promoted by Global Movement of Moderates Foundation (GMMF). GMMF is the brain child of Prime Minister Najib and was adopted by 20^th ASEAN Summit to achieve global peace. It promotes cooperation, mutual respect, tolerance, and harmony as an alternative to counter terrorism. Leaders encouraged collaboration between establishments in India and GMMF for promoting moderation.

Ever since ruthless refusal of verdict of Permanent Court of Arbitration (PCA) that dismissed Beijing claims over South China Sea (SCS), the belligerent rise of China rattles ASEAN nations. Burgeoning power imbalances has made the region conflict prone. Malaysia which has claims in SCS is wary of China’s assertive moves and unabated reclamation of various features in the resource rich region. Malaysia is fervently pushing for India’s “greater role” in maritime security of Asia-Pacific region. Indeed, both leaders, reiterated “commitment to respecting freedom of navigation, and over flight, and unimpeded lawful commerce, based on the principles of international law, as reflected notably in the United Nations Convention on the Law of the Sea (UNCLOS) 1982”. They urged for peaceful resolution of disputes without resorting to threat or force and appealed to maintain international legal order of the seas and oceans. A change in approach of US and belligerent moves of China has prompted ASEAN nations to strengthen ties with a regional partner like India, an acclaimed benign power. For its size, image and expansive demographic spread India is looked upon by smaller countries to play an important role to keep the region prosperous and peaceful.

Malaysian Prime Minister Najib, currently mired in corruption scandals was rescued Chinese intervention. The premier reciprocated Beijing by making huge concessions to Chinese investments. Malaysia is now inundated with Chinese enterprises which is dominating all sectors ranging from infrastructure to real estate. Opposition parties are now wary of colossal Chinese investments are growing suspicious of Beijing’s intentions. Razak’s effusive praise and personal visit to South Indian star Rajinikanth’s house is a desperate attempt to woo the Indian Diaspora, of Tamil descent. While the current visit of Malaysian premier has an entrenched domestic political implication, changing strategic dimensions in Indo-Pacific region calls for a deepening of bilateral ties.

With nations reposing strong hope in India, it is time India improves its credibility by expediting pending infrastructure and investment projects, fast track trade pacts on mutually agreeable terms and make efforts to foster collaboration through intraregional infrastructure connectivity projects. India must now make every effort to ramp up defence ties, ratchet cooperation through joint military exercises to position itself in the Indo-Pacific region as well.

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