M A I N   N E W S

Major trade pact with Malaysia
Ruchika M. Khanna in Kuala Lumpur
Tribune news service

Agreement will allow liberalisation of investment regimes leading to greater FDI Trade between the countries currently stands at $10.5bn, expected to reach $15bn by 2015 Free trade pact to be signed by January 31

India and Malaysia on Wednesday agreed to forge new ties on two of the most important issues for their economies- sealing the Comprehensive Economic Cooperation Agreement (CECA) and contain the threat of terrorism through establishment of a Joint Working Group on Counter Terrorism, besides collaboration in defence.

Prime Minister Manmohan Singh and Prime Minister of Malaysia, Dato Sri Mohd Najib Tun Abdul Razak, while announcing the conclusion of the negotiations for a CECA, said that this will allow both countries to liberalise their investment regimes to facilitate greater FDI in each others’ territory. The sealing of the pact on bilateral trade with Malaysia has been the most successful part of PMs visit to Malaysia. The two leaders said that the free trade agreement (FTA) will be signed by January 31 and this will be implemented by July 1.

Taking into account the India- ASEAN trade in goods Agreement that came into effect from January 1, this year, both sides have offered ASEAN plus market access in goods. India and Malaysia have also agreed to provide access of each others’ services market across all modes and various sectors. The two countries will now finalize areas of economic cooperation in infrastructure development, creative industries, tourism, SMEs, business facilitation, science and technology and human resource development.

“With CECA , we hope that the trade between the two countries will reach to $15 billion by 2015. Our discussions on the issue were broad based and all encompassing. We hope that Malaysia will get an opportunity to participate in the construction projects and other vast opportunities now offered by India,” said Prime Minister Najib.

Malaysia is the second largest trading partner for India within ASEAN, and India is the largest trading partner for Malaysia in South Asia, excluding China. Bilateral trade between the two countries is now estimated at $ 10.5 billion, and this has doubled in the past five years. Manmohan Singh said that though this trade was currently in favour of Malaysia, he hoped that with CECA Indian companies too would get an opportunity to explore the Malaysian market.

The two leaders, while condemning terrorism in all its forms and manifestations, agreed to enhance cooperation in counter terrorism through information sharing and setting up a Joint working Group on Counter terrorism, at an early date. This is of great importance for India as Malaysia is understood to be emerging as a logistics, regrouping and fund raising hub for three militant groups - militants from Punjab, Tamil Tigers and AlQaeda. Jamia Islamia, based in Indonesia is an Al Qaeda affiliate, and is helping the latter in logistics and fund raising here. India and Malaysia have also agreed to enhance defence exchanges and cooperation through regular exchanges between the defence ministers and senior defence officials, chiefs of armed forces and regular service to service staff talks and regular ship visits.

The two sides have agreed to sign a memorandum of Understanding on Cooperation relating to Technical Assistance services in highway management; setting up a joint Information Communication Technology talent development Consultative Committee, besides studying the possibility of joint venture in hydrocarbons sector, between Petronas of Malaysia and ONGC Videsh in third countries.

The two sides also signed as many as five agreements, besides sealing the CECA. These include MoU on Cooperation in field of traditional systems of medicine; MoU on Cooperation in Terrorism; MoU for Cooperation in IT sector; Agreement between CSIR and UNIK of Malaysia on Research and Development Collaboration; and, Cultural Exchange Programme. Union Commerce Minister, Anand Sharma, was also present on this occasion.