Trade between India and Malaysia can now be settled in Indian Rupee (INR) in addition to the current modes of settlement in other currencies. This follows the decision by the Reserve Bank of India in July 2022 to allow the settlement of international trade in Indian Rupee (INR). This initiative by RBI is aimed at facilitating the growth of global trade and supporting the interests of the global trading community in Indian Rupee (INR).
India International Bank of Malaysia (IIBM), based in Kuala Lumpur, has operationalised this mechanism by opening a Special Rupee Vostro Account through its Corresponding Bank in India i.e. Union Bank of India.
Economic and commercial relations are the mainstay of bilateral partnerships. With strengthening bilateral economic and commercial relations, Malaysia has emerged as 13th largest trading partner for India while India figures among the ten largest trading partners for Malaysia which is also our 3rd largest trading partner in ASEAN. A bilateral Comprehensive Economic Cooperation Agreement(CECA) covering goods, services and investment has come into effect from 1 July 2011.
India’s major export items to Malaysia are mineral fuels, mineral oils; aluminum and articles thereof, meat and edible meat offal, iron and steel, copper and articles thereof, organic chemicals, nuclear reactors, boilers, machinery and mechanical appliances; electrical machinery and equipment; etc. India’s major import items from Malaysia are palm oil, mineral fuels, mineral oils, electrical machinery and equipment; animal or vegetable fats and oils and their cleavage products; nuclear reactors, boilers, machinery and mechanical appliances; copper and articles thereof, wood; wood charcoal, aluminum, organic chemicals, iron and steel and miscellaneous chemical products
The first Indian joint venture, Godrej commenced operations in 1968, and in the seventies and early eighties, Malaysia hosted the largest number of Indian joint ventures in any country. Indian companies’ present involvement in Malaysia is in palm oil refining, power, railways, information technology, biotechnology, manufacturing industrial goods, higher education, civil construction, and training.
As per official figures (DPIIT), Malaysia ranks as the 26th largest investor in India with FDI inflow of USD 1.12 billion during the period April 2000 to September 2021.
Presently, there are more than 150 Indian companies, including 61 Indians are expected to be of the tune of USD 7 billion. The highest joint ventures and 3 Indian Public Sector Undertakings operating in investment proposals have been in the telecommunications, Malaysia. Their areas of operation are manufacture of textiles and yarn, followed by fuels (power and oil refinery), roads and highways.
